The Senedd met in the Chamber and by video-conference at 13:30 with the Llywydd (Elin Jones) in the Chair.

Statement by the Llywydd

Y Llywydd / The Llywydd: Good afternoon and welcome to this first meeting in 2024. A happy new year to you all.

Y Llywydd / The Llywydd: I hope you all have a healthy and happy new year.
Before we start today, just to say that those of us who are children of the 1970s have only one image in our minds today, that of a long-haired, sideburned international Welsh rugby superstar, who, with socks around his ankles, became the first ever attacking, side-stepping rugby fullback, and was equally fearless in his try-stopping tackles into touch. Some people don't need surnames; they become legends in their own lifetime. Diolch, J.P.R., for the memories. [Applause.] Fifty-five caps for Wales, eight caps for the Lions, and, apparently, his proudest boast, 'Eleven matches against England, zero defeats'. [Laughter.] As a Senedd, I'm sure we unite in our condolences to his family and to his friends, and to his former team-mates. Diolch yn fawr iawn, J.P.R. Williams.

1. Questions to the First Minister

Y Llywydd / The Llywydd: The next item will be questions to the First Minister, and the first question today is from Hefin David.

Delivery of Primary Healthcare

Hefin David AC: Thank you, Llywydd. J.P.R. was a legend.

Hefin David AC: I hope that's the right Welsh.

Hefin David AC: 1. Will the First Minister make a statement on how the Welsh Government delivers primary healthcare? OQ60492

Mark Drakeford AC: Llywydd, independent providers, through contracts with local health boards for their services, deliver primary healthcare. The Welsh Government sets policy and funding for the NHS, and there's a need to work in accordance with that policy and funding in delivering primary healthcare.

Hefin David AC: Diolch, Prif Weinidog. It's worth remembering that J.P.R. was an orthopaedic surgeon, and therefore made his own contribution to our NHS.
One thing I want to raise today is the Bryntirion surgery in Bargoed, which has long been under the control of the Aneurin Bevan health board, because they couldn't recruit practice managers—GP practice managers—to the northern Valleys, and Bargoed in particular. The health board has now found a resolution to that by advertising and giving the practice to English-based GPs, who will run the practice, and, it appears, will run the practice from a distance. While I'm really glad that the GPs are taking over, because it will mean that they're less likely, in Bargoed, to see locums—they'll see more full-time GP staff there—at the same time, as a socialist, and from the perspective of a socialist Government, this is effectively moving from public sector-provided healthcare to private sector-provided healthcare. While welcoming that Bargoed will be run effectively, and will be run for the benefit of patients—and patients don't need to do anything; it will happen—will he also reflect on the fact that the model we have currently in primary care is in fundamental need of reform?

Mark Drakeford AC: I thank Hefin David for that, and, Llywydd, it is fitting that, today, we are remembering J.P.R. Williams on the rugby field, but also in the contribution that he went on to make in the Welsh NHS for so many years.
Well, like the Member, I welcome the fact that the Aneurin Bevan health board has been able to find new providers for the Bryntirion surgery. It's not the first surgery that the new team will run in the Aneurin Bevan area, and I'm told that the surgeries already run in this way have been welcomed by patients in those surgeries. There's no doubt at all, Llywydd, that we have moved into an era of a mixed economy in primary healthcare. There are far more salaried GPs employed directly by health boards, but also employed within practices themselves, and we know that, for many of the people who have entered and are now leaving medical training, that is a model that suits their future needs better than the old contractor model. But there is life in the contractor model as well, and that's what you see in the developments in Aneurin Bevan. Handled in the right way, there still are GPs who feel that the contractor model is a way in which they can provide those services. They themselves will be employing salaried GPs as part of the new teams that they will be creating. So, this is an evolving picture. I think, over time, we we will see more people employed on that salary basis, either directly or through practices, with fewer GPs themselves invested in that previous model. That model itself is being renewed and modernised, and I think you see that in the Aneurin Bevan developments as well. And the future of primary care will be a more mixed economy, more salaried staff, greater reliance on the wider primary care team, and there's life in that model, as the Aneurin Bevan developments demonstrate.

Y Llywydd / The Llywydd: Russell George.

Russell George AC: Thank you, er, er, Presiding Officer—I nearly forgot. [Laughter.] It's a new year. [Interruption.] No, it has only been three weeks. I won't wish you a happy new year, because I'll probably get the Presiding Officer getting angry with me as well, First Minister—but a happy new year, anyway.
First Minister, I listened to your answer with interest. I'm sure you would have seen the story on the BBC this morning about a GP who returned her NHS contract to open a private surgery. I read this with interest. Information from the British Medical Association shows that the number of patients per full-time equivalent GP in Wales has gone up from 1,676 in 2013 to 2,210 in 2022. So, reading that, it's not much of a surprise to see GPs leaving to go and work elsewhere, considering the increased amount of pressure that they're under. So, listening to your response to Hefin David, First Minister, I wonder if you could also outline what the Welsh Government plans to do to encourage GPs to continue working within the Welsh NHS, and attempting to address that figure I referred to in regard to the change between 2022 and 2013. And what are you doing to support practices that consistently rank highly on the primary care escalation framework?

Mark Drakeford AC: Llywydd, I think there are two quite different questions there. Of course, GPs leave the health service, but GPs join the health service as well. In the last year, we saw again a rise in the number of GPs employed in the Welsh NHS, both on a head-count basis and on a full-time equivalent basis, just as there was a rise in the number of trainee GPs, just as there was a rise in the number of practice staff. So, the primary care system in Wales, of course it is under pressure; primary care is under pressure everywhere in the United Kingdom. But, here in Wales, we have a growing number of staff, we have an innovative approach to assisting GPs, through urgent primary care centres, through the '111 press 2' service, through the £5 million that was invested by the Minister in extending professions allied to medicine as we went into this winter, because it is that wider primary care team that is the future of primary care here in Wales. And we look to work with the profession in the new contract, the new GMS unified contract that began on 1 October last year, on that journey.
In relation to the number of practices that are at the high end of the escalation system, the numbers reflect the pressure that the system has been under, but there are still more practices at the bottom end of escalation than there are near the top. We receive those reports, which are self-assessments—they're not the Welsh Government's assessments; they're the practices' own assessments—every week, and that does allow the Welsh Government to be able to identify with local health boards those practices that are persistently in the highest level of escalation, and then to offer them additional help to be able to deal with the demands that they are facing.

Mabon ap Gwynfor AS: As GP surgeries close and the lack of availability of GPs becomes more and more common, we are seeing a number of private medical companies starting to provide GP services outwith the NHS within our communities, with people paying between £40 and £70 for appointments because no GP is available to serve them. In these surgeries, they get half an hour or more with the GP, and they get fast-track referrals and other benefits. The upshot of this is that we have a two-tier society being introduced once again, under a Labour Government. Is this the Labour vision for health services in Wales?

Mark Drakeford AC: Well, of course, I don't agree with Mabon ap Gwynfor. What he says is not true about health services here in Wales. More people work for the public NHS in Wales than at any time in the history of the health service. Of course, there are some people who are providing private services and there's nothing that we can do about that. But every month there are 2 million contacts between people in Wales and the national health service. That's where we are focusing as a Government and that's where the people of Wales are served.

Sharing Misinformation Online

Ken Skates AC: 2. Will the First Minister make a statement on the threat to Welsh democracy posed by the sharing of misinformation online? OQ60488

Mark Drakeford AC: Llywydd, online misinformation is a deeply harmful but contemporary feature of all democratic societies. We work with groups within Wales and across the UK to combat the misinformation itself, to help informed citizens to identify misinformation and to provide authenticated sources of information on which individuals can rely.

Ken Skates AC: Thank you, First Minister. Over Christmas, I was sent a link by a constituent to a news item on an American platform purporting to be a news provider, which claimed that the Welsh Government was using 14-year-old schoolgirls to attract military-age men from countries where there are no rape laws, including Africa and the middle east. Would you agree that this sort of news article is totally unacceptable, damaging to democracy, and, First Minister, do you think there are some other examples over recent weeks of misinformation being promoted online, perhaps emanating from closer to home?

Mark Drakeford AC: Well, Llywydd, I'm aware of the story to which Ken Skates refers, and it is both utterly untrue and utterly irresponsible to make such claims. Here were a group of young people of their own volition looking to make sure that others who might come to their area would feel welcomed and know that they would be welcomed in that community. The result of that misreporting is that those children's welcome has had to be taken down and that new security arrangements have had to be made at those places where the Welsh Refugee Council operates. Individuals who work for the refugee council were named in those highly irresponsible reports and have had their own lives disrupted as a result. The police are involved in investigating what has been said, that willful misrepresentation by people who claim—and it's a sickening claim—to be interested in the well-being of young people, whereas, in fact, everything that they have done has acted to put young people at greater risk. Anybody who claims to care about the safety of our young people should not be sharing false claims about them.

Mark Isherwood AC: Well, of course, I endorse Ken Skates' concerns about that particular issue. More broadly, people, young and old, increasingly self-select their news from online sources that reinforce rather than challenge their own perceptions. In consequence, I regularly receive e-mails on many issues claiming that they are, and I quote,
'all part of a cunning plan by Big Brother governments to control our lives'.
The Welsh Government allocated £1.6 million to a communications campaign running alongside the implementation of its default 20 mph policy, using selective evidence and ignoring all the research and evidence that challenge their claims. Last week, it was revealed that the Welsh Government is spending over £500,000 of taxpayers' money on a public engagement strategy, including over £61,000 on social media advertising, to burnish its own green credentials, at a time when it's making widespread cuts to public services and despite the climate change committee finding that Wales is making insufficient progress in this area. How can you justify such actions when their provably inaccurate content only fuels the public scepticism we're all concerned about?

Mark Drakeford AC: Well, Llywydd, the Member talked about self-selected information and then continued to offer us exactly that. Let us take the two examples that he offers. The claims that were made, set out in the Welsh Government's documentation, around 20 mph zones were tested by the UK Statistics Authority, who found that what we said was accurate and asked us to put even more information into the public domain, which we then did, to demonstrate the truth of what we said in that assessment. It did not find for a single moment that what we had said was untrue; it simply asked us to do more to help people to see the truth of the claims that we had made.
And as to his second example, has he not seen today the news about the impact of climate change over the last 12 months alone—a year in which, day after day, the impact of climate change was being seen in the United Kingdom? We spent £0.5 million to try to save the planet, and the Conservative Party want to take issue with it. Every amount in that budget is designed not to burnish the credentials of the Welsh Government; it uses information from private employers, it uses information from other employers here in Wales, and it is designed to demonstrate that, by acting together, it is possible to do something to tackle the greatest challenge that faces us today and which would otherwise be left to our children and our grandchildren to pick up the mess that has been created. How can it be—how can it be—that a serious political party thinks that they can make a point about spending £0.5 million to contribute to that being a misuse of public money? I do not regret a single penny of it, and neither should you.

Adam Price AC: Devolved Governments are at the forefront of efforts to combat the threat of disinformation to our democracy. The province of South Australia and the Australian Capital Territory have banned disinformation in political advertising. The states of Michigan and Minnesota have prohibited the use of deceptive deep-fake media in election campaigns. And, at a different scale, the EU has recently announced that it will end the use of personal data in political microtargeting. We have the power to do all of those things and more, and we have the vehicle in the Elections and Elected Bodies (Wales) Bill. So, will the Welsh Government place Wales at the front line in this battle against the political pandemic of lies and deception that is threatening the future of democracy worldwide?

Mark Drakeford AC: Well, Llywydd, I thank Adam Price for those important points. I definitely do want Wales to be on the front line of that effort, and there are things that we are doing already in Wales. On 1 November, the new digital imprints regime was instituted here in Wales. In future, overseen by the Electoral Commission, when political parties publish information—not in print, where it's always been necessary to have an imprint on it, but digitally—it will in future be necessary to have information there that shows where that information has come from. At the same time, we will provide, as a Government, in future elections, an online information platform, which will provide voters with reliable information about the candidates who are putting themselves forward and policies that political parties are pursuing.
One of the things that I think democracies can do is to provide a place where voters and citizens can go to find information that has been authenticated and on which they can rely. And I hope that, in Wales, we're already doing things to move in that direction, and there may be more ideas from other parts of the world, as Adam Price has outlined, that we can learn from and adopt here too.

Questions Without Notice from the Party Leaders

Y Llywydd / The Llywydd: Questions now from the party leaders. The leader of the Welsh Conservatives, Andrew R.T. Davies.

Andrew R.T. Davies AC: Thank you, Presiding Officer, and could I identify with the comments that you made at the start of the Plenary session about J.P.R. Williams, a resident of the Vale of Glamorgan, and someone who I had the pleasure of enjoying his company on several occasions?
First Minister, yesterday you held a press conference that alluded to the fact that the 20 mph speed limit that the Welsh Government have brought forward was going to be looked at through the premise of gentle enforcement. In fact, I think the word that you used was that if you were 'genuinely' confused you would not be prosecuted, but if you were confused you would be prosecuted. What's the difference?

Mark Drakeford AC: Well, the difference is, Llywydd, that that is not what I said. [Laughter.] That's the first difference. What I said was, in answer to a question, that the enforcement authorities in Wales will pursue the same policy in relation to 20 mph zones as we became familiar with during COVID, that they will begin with engagement. Where people genuinely do not understand that the law has been broken, then they will engage in education with those people, and they will only take enforcement action when they are sure that that is needed to keep roads and communities safe and where the evidence is of wilfully breaking the law. So, what I said was: where people are genuinely confused, then the system will seek to engage and to educate them. Where people claim to be confused but there is no evidence that confusion lies at the root of their behaviour, then they cannot expect that enforcement action will not be taken.

Andrew R.T. Davies AC: Well, that's as clear as mud, isn't it, First Minister? I mean, I've got the words that you used here. You actually said that the 'genuinely confused' would not be prosecuted or fined, and then you went on to say, 'rather than just being confused.' You can imagine the conversations—. Those are your words. If you want to take issue with it, take it up with the BBC, because it's a direct quotation off their website.
Now, the blanket 20 mph that your Government brought forward has proven to be deeply, deeply unpopular—deeply unpopular. It's a national speed reduction—[Interruption.] It's nice to see the Deputy Minister back here, chuntering from a sedentary position again. It has caused huge amounts of concern the length and breadth of Wales, and the way it'll be implemented and the fines that will arrive on people's doormats will jeopardise livelihoods and lose people's jobs, without the solid evidence that would show the support of the points that you have made. So, I say to you again: what conversation have you had with the Crown Prosecution Service and the police to distinguish between the 'genuinely confused' and the 'confused', so that ultimately police officers and enforcement services will not be prosecuting people who are on the wrong side of this law through no fault of their own?

Mark Drakeford AC: Well, Llywydd, we've had a discussion already this afternoon about deliberate misinformation, and the leader of the opposition continues to do that here this afternoon. He says that this is a blanket ban. He knows absolutely that it is not a blanket policy. As I've understood it, he himself is in favour of 20 mph zones in certain circumstances. I've seen him with placards demanding 20 mph zones outside schools, outside hospitals and so on. Even he doesn't believe in a blanket policy, and it quite certainly is not the blanket policy of this Welsh Government. It never was, it never has been, and it isn't a blanket policy today. The fact that he continues to repeat it and he knows that it isn't true is a very good example of the points that Ken Skates made in his question about misinformation being far too close to home in this Chamber as well as in the outside world.
Police will enforce the policy in the way I have just described, Llywydd. Enforcement action is the last, not the first, resort. The first resort is to make sure that people have understood the rules, and, where people need to have their understanding extended, then that is what the system will do. Where people drive dangerously, where people deliberately and knowingly break the law, then the police will take enforcement action, and I would expect the leader of the opposition to endorse that position and to support the police in their actions.

Andrew R.T. Davies AC: Anyone who drives dangerously or deliberately breaks the law deserves to be prosecuted, but when you bring bad law forward that isn't clear, such as the law that you have brought forward here—the tweet that the Deputy Minister put out yesterday said that the threshold for prosecution now is not the 24 mph that would normally be adhered to, which is 10 per cent plus 2; it is now 10 per cent plus 4—and then the First Minister stands at a press conference and says that if you're genuinely confused rather than confused you won't be prosecuted, what hope have the police got and the CPS got? And that's the point we're making. This is a bad piece of law, brought forward by your Government, that is actually more confusing and more dangerous. And ultimately this piece of law should be withdrawn and commonsense prevail. And your two leadership candidates, one of the first statements they made was to promote a review of this piece of legislation. So, ultimately, it shows that even on your own benches there is disquiet about this piece of legislation that you've brought forward. So, why don't you just scrap this piece of legislation and move back to the 30 mph that we had in this country before 17 September?

Mark Drakeford AC: Well, Llywydd, there is a series of points in there, but surely the most significant of all, and the one of which he should be deeply ashamed, is his suggestion that it is somehow legitimate to break a law simply because you think it is a bad law. [Interruption.] Oh, no. How many times did he say, 'This is a bad law’? And what he intends to do is to encourage people to believe that, if you think a law is a bad law, somehow it is legitimate for you to break it. [Interruption.] Well, that is the message that people outside this Chamber will take, and you know that you are doing it as you do it. [Interruption.] I'll tell you now that when you get up and say here that there are good laws and there are bad laws, you are encouraging people to believe that it is legitimate for them to act differently depending on how they themselves perceive the law, and that is a deeply, deeply dangerous message, and it is a particularly dangerous message for somebody who comes here to make the law. Every single person in this Chamber has a responsibility for explaining to people that if you make the law, you must uphold the law, and that law is there to be upheld. It will be upheld, it will be upheld sensitively and sensibly, and a good deal more sensibly than he has been this afternoon.

Y Llywydd / The Llywydd: Leader of Plaid Cymru, Rhun ap Iorwerth.

Rhun ap Iorwerth AC: Thank you very much, Llywydd, and may I start by wishing everyone a very happy new year? And may I pay my own tribute to J.P.R. Williams, a true icon of my childhood, one of my first rugby heroes? And we remember him today, as we remember the journalist Vaughan Hughes and the singer Leah Owen—2024 has brought a heavy price already; we hope for a better year in terms of health and peace.
It will be a crucial year politically, with a general election and a race for the Labour leadership in Wales.

Rhun ap Iorwerth AC: The year began with the candidates to be the next Labour leader in Wales setting out their stalls. All sorts of plans, including one five-point plan. I'm sure the First Minister winced at that. Maybe it's okay for his own side to come up with five-point plans, but not us in opposition. But no matter how many points are in the plan, there is no more important a priority now, I guess, than fair funding for Wales. The First Minister will know that, given the budget we're going to be debating later on.
One pledge by the education Minister in his leadership bid is to reverse the cuts that are due to come in in his own budget, but only if he gets more money from Whitehall. He's making my argument for me. But, of course, the Tories won't pledge more money for Wales. They're not interested. And as we've seen with HS2 consequentials, Keir Starmer is refusing to make that pledge too. The First Minister hasn't been able to get that pledge from him. What makes him think that either of his potential successors will be able to?

Mark Drakeford AC: Well, Llywydd, the leader of Plaid Cymu's obsessive interest in the Labour Party continues. I'm quite happy to start the new year by sending him an application form, and then he'll be able to take part in the affairs of the party to which he devotes most of his attention here on the floor of the Senedd.
The position of this party has always been that fair funding needs to come to Wales, that the Barnett formula is well past its effective date, and that funding based on need would see a different flow of funding here into Wales. That is the policy of the Welsh Labour Party and the Welsh Labour Government, and we will continue to mount the arguments for it.

Rhun ap Iorwerth AC: The First Minister says again—he's said it before—that I'm somehow obsessed by the Labour leadership. It's not obsession. Before Christmas, he was saying that it was none of my business who the next leader of the Labour Party is. As far as I know, that new leader is going to become our First Minister. It's all of our business, and it's called scrutiny. Maybe he's saying there should be an election immediately so it's all of our business who becomes the next First Minister for Wales. But, when it comes to expectations around funding, we can only go on what we're being told or what we're not being told by both Labour and the Conservatives; it's why we need Plaid Cymru to stand up for fairness for Wales.
Now, both candidates—both candidates—to become the next Labour leader in Wales want to prioritise the NHS. Few would disagree with that. One has a vague pledge that spending per head on the NHS in Wales wouldn't fall below England, which is a pretty weak promise, if we're honest, and which also suggests it is all about money, but as the director of the Royal College of Nursing in Wales said last week, we keep being told there's no money, yet we're not thinking creatively about how we use the money that is in the system. Will the First Minister join me in calling for really creative thinking in this campaign, which is lacking so far? Will he also call for honesty about the candidates' record in Government, because you'd think that neither had been a Minister before by what they're saying? And does he share my disappointment that neither are pledging to demand fair funding for Wales from Labour bosses in London?

Mark Drakeford AC: Well, Llywydd, I think we'd be more open to lessons in the Labour Party about how we conduct our leadership election campaigns if we were being talked to by a party that had a leadership election in the first place.

Rhun ap Iorwerth AC: Well, I wish the First Minister wouldn't be so obsessive about how we changed our leadership in Plaid Cymru. [Laughter.]
One last question, if I may, again linked to some of what we've heard in the Labour leadership campaign, that I believe I'm able to talk about this afternoon in the Senedd, Llywydd. Both candidates have pledged a review of the implementation of the new 20 mph limits. It came as a bit of a surprise to me, given that Plaid Cymru put forward an amendment here in the Senedd four months ago calling for that review—an amendment that was passed with Government support. Now, my position is that 20 mph works well in most places. We've supported the principle. It was brought in by Labour, but it was a Conservative Member who first proposed the idea to the Senedd. But there are some places where I feel it's unreasonable, there's inconsistency, and it just makes sense to me that a review takes places. Now, are the two candidates for the leadership saying that four months after the Plaid amendment was passed, nothing has happened, or do they just not know about it?

Mark Drakeford AC: Well, Llywydd, the reason that the Government supported the Plaid Cymru amendment is that it was Government policy, because I said the very first time I was asked a question about 20 mph policy that, of course, a change of this magnitude would need some time to settle in and that it would need to be reviewed to make sure that it can be fine-tuned. I agree with what the leader of Plaid Cymru says, that there is evidence of some inconsistency in the way the guidance has been implemented by different local authorities, and there are some anomalies in the way the guidance has been interpreted, so it is both the policy of the Government and the policy of my colleagues that we should review the evidence and iron out any of those inconsistencies or needs for fine-tuning in the policy. That's the policy of the Government; that's why the Plaid Cymru amendment was supported, and that's exactly what will happen.

Gender Self-identification

Laura Anne Jones AC: 3. Will the First Minister provide an update on the Government's position on gender self-identification? OQ60478

Mark Drakeford AC: Llywydd, gender recognition is a reserved matter. Our commitments on gender recognition and supporting trans individuals remain as detailed in our LGBTQ+ action plan, and outlined in our programme for government and the co-operation agreement.

Laura Anne Jones AC: First Minister, in the summer the UK Labour Party finally u-turned and abandoned its support for self ID, after realising the profound impact it would have on fundamental women's rights. It's a world away from your stance on the issue here in Wales, where you seem intent on imposing self ID. We will, of course, all be very interested to hear the candidates for First Minister's stance on this issue, but there is clearly a divide between the Labour Party in Westminster and Welsh Labour on whether to pursue gender self ID. First Minister, I simply want to know: who is right on the issue, you or Keir Starmer?

Mark Drakeford AC: Well, Llywydd, another application to join the Labour Party—the second we've had this afternoon. I've set out our policy. It is set out; it is our policy as is set out in our LGBTQ action plan, and that is to recognise the rights of trans people here in Wales, a group of people who are more ostracised and unprotected than almost any other group, and where hate crime against trans people in Wales increased by 11 per cent in the last year. I make no apologies at all for making sure that our actions as a Government are designed to recognise the rights of those people, and to make sure those rights are respected.

Improving Educational Outcomes

Tom Giffard AS: 4. What is the Welsh Government's strategy for improving educational outcomes? OQ60477

Mark Drakeford AC: Llywydd, sustained investment in twenty-first century facilities, a new Curriculum for Wales, and a continuous focus on the quality of teaching in the classroom are amongst the measures being taken to improve educational outcomes in Wales.

Tom Giffard AS: First Minister, we've seen the Welsh Labour Government cutting funding for education in its most recent budget. That's despite the current education Minister touring the country, saying it wouldn't happen on his watch, but not before he votes for it today. But they come against the backdrop, yet again, where Wales ranks below England, below Scotland and below Northern Ireland in the latest Programme for International Student Assessment rankings, in every subject assessed. We need to turn education around in Wales.
The Welsh Conservatives have a plan to prioritise education by putting 5,000 more teachers back into classrooms, supporting those with additional learning needs, and developing an enhanced programme for more able and talented learners. First Minister, how can it be justifiable that the Welsh Government is simultaneously cutting education budgets whilst wasting millions and millions on vanity schemes like 20 mph speed limits and more politicians?

Mark Drakeford AC: Well, Llywydd, I look forward to the proposals of the Conservative Party during the budget process. They will find they're not able to spend money twice; so money that's been spent already will not be available to fund their plans. The revenue support grant in Wales, which is the main vehicle through which education services are supported, has not been cut; it will rise by 3.1 per cent again this year—well in advance of support for local authorities in England, by the way. And if any party or any individual Member has a plan to spend any more money, in a budget that is worth £1.3 billion less than when it was originally set, then there will be a responsibility on that individual and that party to tell us where the reductions will come to support it. If you have a plan to spend more in one area, you will have to tell people where your plan is to spend less in another. And it can't be by pointing to money that has already been spent, because that simply won't be available to you.

Sarah Murphy AS: First Minister, in December, there was a global research paper published by Cambridge and Zurich universities—240,000 students from across the world—and it found that the relative underperformance of disadvantaged students at school has little to do with them lacking the character, attitude or mindset of their wealthier peers. The lead author said:
'The idea that children can overcome structural disadvantage by cultivating a growth mindset and a positive work ethic overlooks the real constraints many disadvantaged students face, and risks blaming them for their own misfortune.'
For the young people in this paralysing situation, it will follow them into the world of work, illustrated recently by information from the High Pay Centre, who have calculated that the bosses of the FTSE 100 companies made more money in 2024 by lunchtime on 4 January than the average UK worker will earn in the entire year. We cannot stand by and allow such an unlevel playing field to continue to exist. It is clear that the UK Tory Government don't want to admit this link between their austerity measures tanking the economy and our public services, and the impact that this has had on our children and young people. But would you agree with me that tackling the impact of poverty on attainment must be at the heart of what Welsh Labour do, to help free young people from the structural disadvantage that this poverty can create? Diolch.

Mark Drakeford AC: Well, I thank the Member for Bridgend for that extra question, Llywydd. The Cambridge study was, I thought, very interesting, because it does demonstrate that while there is a lot you can do, through motivation and encouragement and so on, the fundamental barriers that face young people in any system are those of poverty and inequality, and we have lived through an era in which inequality has got worse year on year. The United Kingdom is now the most unequal country in the whole of western Europe, and that means that the life chances of so many young people are compromised before their life has even begun.
Here in Wales, I think we can genuinely say that we have taken those issues seriously. If you look at the PISA results to which Tom Giffard referred, the attainment gap in Wales is lower than in any other part of the United Kingdom: lower for maths, lower for reading, lower for science. And that demonstrates, I think, the way in which, as a Government, we have been serious about trying to make sure that those young people who need the help the most receive that help to the extent that we are able to provide it here in Wales.

The Provision of Apprenticeships

Luke Fletcher AS: 5. What discussions is the Welsh Government having with key stakeholders in the work-based learning sector regarding the provision of apprenticeships? OQ60493

Mark Drakeford AC: Llywydd, Welsh Government officials met with all 10 apprenticeship providers in Wales prior to the Christmas recess. We will continue to discuss with the sector how best value can be achieved from the £138 million that will be invested in apprenticeships in Wales in the next financial year.

Luke Fletcher AS: Thank you for that response, First Minister.

Luke Fletcher AS: And I am sympathetic to the difficulty the Government faces with this budget, but a cut to apprenticeship funding deeply concerns me. Its effects will be felt for some time, and we are talking about the futures of so many young people here in Wales. Apprenticeship providers are raising concerns, further education colleges are facing uncertainty about their own futures as institutions at a time when we need them more than ever to realise our ambitions around economic development. Now, the sector tells me that there's no clarity on what will change, except for the loss of funding. Therefore, would the First Minister provide some clarity on the future of apprenticeships, other than the FE sector needing to do more with less?

Mark Drakeford AC: Well, Llywydd, as I said, our conversations with the sector continue. What I can say is that even with the reductions that have had to be made in the budget for next year—reductions, by the way, made up not simply of the fact that our budget is worth £1.3 billion less, but by the loss of £375 million annually of EU funding, because EU funding in Wales has been at the heart of our ability to expand apprenticeship provision. The levelling-up scheme, which is its replacement by the UK Government, specifically forbids local authorities from pooling money together for these sorts of Wales-wide purposes, and one of the solutions to the problem that we find ourselves in in this area is the solution that the Labour Party at the UK level has already endorsed, and that is that under a future UK Labour Government, responsibility for decision making over post-EU funding will return here to Wales.
In the meantime, apprenticeship starts will still be at the level achieved in the last Senedd term, and we will continue to have a focus on those sectors where we know those apprenticeship opportunities make the greatest difference—construction, care, engineering and health—and there will be an alignment between the way we spend our apprenticeship money and our young person's guarantee to make sure that young people needing that start in their careers continue to receive it here in Wales.

Paul Davies AC: First Minister, in Pembrokeshire there is an anticipated cut of up to 50 per cent of new apprenticeship starts in the contract year from August 2024, which will have a big impact on these skills in the local area. And I appreciate very much the pressures on budgets across the whole Government, and, of course, pressures for all Governments when it comes to finances. Now, as you know, my constituency is strategically important to Wales and the UK's energy needs, and with the development of a free port and advancements in floating offshore wind, the time to invest in skills and developing the workforce, of course, is right now. So, can you tell us what specific discussions the Welsh Government is having with stakeholders in Pembrokeshire regarding the provision of apprenticeships? And can you also tell us what the Welsh Government has learned from the delivery of skills programmes in other free ports, and how that could help deliver the skills needed to support the Celtic free port?

Mark Drakeford AC: Llywydd, as I said in my original answer, Welsh Government officials met with all 10 apprenticeship providers in Wales just before the Christmas recess, and those conversations will continue. And they will certainly have met with providers in the Pembrokeshire area. I take very seriously the points the Member has made. There are new opportunities in that part of Wales, and new skills will be required in order to make the most of the opportunities that are there from renewable energy on the sea and from the sea. Those points will be taken very seriously in those discussions.
In the end, there is a fixed budget within which the Welsh Government has to operate. The reduction in apprenticeship funding is less than in a number of other areas that the Minister has had to find within his own budget. The most we ever spent in a single year on apprenticeships in Wales was £147 million, and in the next financial year we will spend £138 million. So, we will be focused on what we can do with that very significant sum of money, and that will include what we can do for those young people in Pembrokeshire looking to those new possibilities for the economy in that part of Wales.

Huw Irranca-Davies AC: First Minister, I’ve had discussions with representatives from ColegauCymru, and I’m sure Luke has as well, and I thank him for the way he’s presented this question, cognisant of the real financial perils that we are currently in, which the First Minister has outlined. Paul also said the same. But we’ve me with them, and for us, in our area, like Bridgend, apprenticeships are very much the way into skilled, well-paid occupations, lifelong occupations. But we can’t ignore the financial constraints currently on the Welsh Government, partly because of the loss of EU funding and partly because of the loss of control over funding of apprenticeships, which we should have here in Wales, not being administered from Whitehall.
But as we enter this period where there are real storm clouds, I think, can I just seek an assurance that he will, and his Ministers will, work intensely with the college sector, and with work-based providers as well, to get us through this storm? Because we must hope it cannot always be this bad with budget settlements, it cannot always be this bad with settlements for training of our young people as well. We will get through this, but in order to do so, the Welsh way of working in partnership to get through it is going to be more critical than ever.

Mark Drakeford AC: Huw Irranca-Davies points to a fundamental problem here, and that is the way that the apprenticeship levy operates. I was the finance Minister, Llywydd, on the day that the UK Government announced that Wales would be getting, as I recall, £109 million extra for apprenticeships through the levy. It was only when you read down in the small print that you found that we were losing £117 million in the cuts that they had made to other forms of funding for apprenticeships in Wales. So, we weren’t gaining £100 million; we were actually losing money. There’s a flaw at the heart of the way in which this is funded, and Wales is not well served by that model at all.
I’m very happy to give an assurance to the Member, however, that that partnership way of doing things, being around the table even when there are difficult decisions to be made, is the way that we will navigate our way through next year, bringing those providers together, hearing the voice of young people as well in those choices, and the preferences of employers. In that way, we will find a path to make the maximum value out of the very considerable sums of money that will still be invested in this area.

Community Safety in Mid and West Wales

Cefin Campbell AS: 6. Will the First Minister make a statement on the impact of the Welsh Government's draft budget on community safety in Mid and West Wales? OQ60487

Mark Drakeford AC: I thank Cefin Campbell for the question. Next year's revenue budget is worth £1.3 billion less than Chancellor Sunak said was needed for Wales when setting that budget in October 2021. The draft budget focuses on those community safety responsibilities devolved to the Senedd. There is simply less money available to fill gaps in services that remain the responsibility of the UK Government.

Cefin Campbell AS: First Minister, I'm very grateful for the innovative role played by the Welsh Government in funding police community support officers, contrary to the underinvestment in policing that has happened under the Tories at Westminster over the last decade and more. There's no doubt that PCSOs play an important part in communities in Mid and West Wales, and more often than not they operate as important eyes and ears within our local communities. I know that the Government appreciates the work that they do, and already funds some 600 of them across Wales.
However, in the draft budget, a cut of £7.5 million in the PCSO budget was announced, and the budget also suggests cutting funding for the police schools programme, which holds important conversations in all primary and secondary schools on a range of issues, including substance misuse and online safety. This is a service that's very much appreciated by schools, parents and pupils alike.So, as these two services are at the core of developing close relationships between communities and the police force and assist in tackling crime, can I ask what steps the Welsh Government intends to take to mitigate the impact of these cuts on community safety and on law and order more generally?

Mark Drakeford AC: I thank Cefin Campbell for those supplementary questions. Of course, we do appreciate the work that PCSOs do here in Wales. That's why the Government invested in PCSOs at a time when the number of people working for the police had fallen after cuts from the UK Government. And we have supported the schools programme as well. But we've come to a point now where—as I said in the original answer—we have to focus on the responsibilities that have been devolved to the Senedd. And when there is less money available, one of the things that we can do is focus on those things where we receive funding to do things.

Mark Drakeford AC: It's simply not possible, Llywydd, when your budget has been squeezed to the extent that ours has, to go on filling gaps left in services for which this Senedd is not responsible. We will still provide over £15 million to support PCSOs here in Wales. But the fact that we are not able to go on filling those gaps to the extent we have in the past has allowed us in the community safety area to go on funding without reductions those measures in the 'Anti-racist Wales Action Plan', the Wales Hate Support Centre, the community cohesion programme, the work we do jointly with the police in relation to substance misuse, and the investment we will make in community mental health services. All of those are part of that wider picture of community safety funding in Wales. We've protected the services for which we are directly responsible and we have had to—despite our appreciation of that work—pull back from some of the funding that we have been able to make in services for which the responsibility and the funding responsibility lies elsewhere.

Jane Dodds AS: Good afternoon, First Minister. I also wanted to follow up on the issue of PCSOs, understanding totally the budget restrictions that the Welsh Government has, and to talk about the responsibilities of the police and crime commissioners and how they potentially could help to increase community engagement when it comes to tackling crime. I facilitated a community meeting in Aberystwyth with the local councillors and the police and crime commissioner, and that was two years ago. We're still waiting for improvements there. So, I just wondered what conversations and what improvements you feel could be made in working with our police and crime commissioners across Wales to help in that community engagement. Diolch yn fawr iawn.

Mark Drakeford AC: Happy new year to Jane Dodds, and I thank her for her question.

Mark Drakeford AC: We have very regular engagement as a Welsh Government, primarily through the Minister for Social Justice, with our police and crime commissioners. Formally that is done through the policing partnership board for Wales that we jointly chair, but it also happens beyond the board itself, with many conversations with the lead commissioner—the north Wales commissioner as that is at the moment—and with other commissioners across Wales. And, of course, Llywydd, with elections for police and crime commissioners happening in Wales in May, the coming months will be an opportunity for direct conversations between Welsh electors and their candidates to be police and crime commissioners in order to achieve some of the things that Jane Dodds pointed to: a close alignment between the ambitions of police and crime commissioners and the expressed needs of those local communities.

Poverty in South Wales East

Peredur Owen Griffiths AS: 7. What is the Government doing to address poverty in South Wales East? OQ60491

Mark Drakeford AC: We continue to utilise all the levers available to us to support those living in poverty in South Wales East and across Wales. Our draft budget prioritises help for those households thatare hardest hit and leaves money in the pocket of those who need it most.

Peredur Owen Griffiths AS: Thank you for that answer.

Peredur Owen Griffiths AS: Over the Christmas period, the Trussell Trust released figures that showed that Wales has the highest foodbank use of any UK nation; in fact, when the figures are broken down, you'll see that Wales has a higher foodbank use than any part of England. The increase in the numbers of people using the service in the last year is particularly stark. This has been followed by the news that EDF, Octopus and Scottish Power have been given permission to restart involuntary prepayment meter installations, just as energy prices rise. Can you ensure that you will do everything in your power, in your last weeks in office as First Minister, to ensure that the most vulnerable in society are not disproportionately affected by budget cuts or decisions taken in Westminster?

Mark Drakeford AC: I thank Peredur Owen Griffiths for that, Llywydd. The Trussell Trust figures are stark, and they demonstrate the point I made earlier about the sharply unequal society in which we live and the impact of the cost-of-living crisis on so many families here in Wales. We will quite certainly be holding the regulator to account for the decision they have made to allow companies to make applications for involuntary prepayment meter installation. The regulator has published a set of rules, which are significantly stricter than the previous arrangements; they don't go far enough, in our view, but they are a considerable advance on the previous position. It's for the regulator now to ensure that any applications that make their way to the courts are consistent with the rules that they themselves have set out.
We've talked a lot about the budget this afternoon, Llywydd, and one of the areas where you can most plainly see the priority that this Government has placed on defending those people whose needs are greatest is exactly the area that the Member has raised in his supplementary question. Our investment in the discretionary assistance fund will be the highest ever next year; we will continue to find £280 million together to support council tax benefit and £93.5 million to implement universal free school meals as part of the co-operation agreement; there is no reduction in the amount of money in the budget for the school holiday enrichment programme; the pupil development grant will remain at this year's heightened level into next year as well. There are some very difficult decisions in the draft budget that we will be debating later this afternoon, and we've heard some of those difficult spots this afternoon, Llywydd. But when it comes to those services that most directly affect those who are most in need, it was the collective determination of this Cabinet that those budgets would be protected, and you can see that in the budget.

South Wales Fire and Rescue Service

Vikki Howells AC: 8. Will the First Minister set out the Welsh Government’s response to the Independent Culture Review into the South Wales Fire and Rescue Service? OQ60485

Mark Drakeford AC: Llywydd, this is a highly critical report that exposes underlying failures in leadership, governance and decision making within the service. It demonstrates the need for fundamental cultural and managerial change. The Deputy Minister for Social Partnership will make an oral statement setting out the Welsh Government's initial response later this afternoon.

Vikki Howells AC: Thank you, First Minister. I must say that I found Fenella Morris KC's culture review into the South Wales Fire and Rescue Service to be a very sobering read indeed. Despite the serious deficiencies evidenced, we must remember that the review's findings do not apply to all members of the service, and we must recognise the bravery and professionalism of those men and women who put themselves in danger to keep us safe.However, the review is an urgent call for action. Ahead of the Deputy Minister's statement later today, I would like to ask you, as First Minister, what action the Welsh Government is taking to drive through that change in culture that is so desperately needed.

Mark Drakeford AC: I thank Vikki Howells for that, Llywydd. She makes an important point that when a report of this sort is published, and it is a shocking report to read, one of the difficulties is that it casts a shadow over all of those people who do such good work in the service every single day. The Deputy Minister will set out a hard-hitting set of responses that the Welsh Government will make to this report.
The fire and rescue service is a constitutional anomaly in the sense that many of its responsibilities are not exercised at all here in the Welsh Government. But when a service fails, there are things that we can do, and the Deputy Minister will set out her initial thoughts about the actions that the Welsh Government may need to take in order to help with the recovery of that service, and to ensure that there are high-quality fire and rescue services available to the people of south Wales, delivered in a way that does not demonstrate the breakdown in culture and chains of responsibility that the report of Fenella Morris so vividly illustrates.

Y Llywydd / The Llywydd: Thank you, First Minister.

2. Business Statement and Announcement

Y Llywydd / The Llywydd: The next item will be the business statement and announcement, and I call on the Trefnydd to make that statement—Lesley Griffiths.

Lesley Griffiths AC: Diolch, Llywydd. There are three changes to this week's business. Shortly, the Deputy Minister for Social Partnership will make a statement on the South Wales Fire and Rescue Service review of culture and values. The Minister for Economy will then make a statement on the compound semiconductor industry, and, finally, the Deputy Minister for Arts, Sport and Tourism will make a statement on the statutory registration and licensing of visitor accommodation. Draft business for the next three weeks is set out on the business statement and announcement, which can be found amongst the meeting papers available to Members electronically.

Darren Millar AC: Trefnydd, can we have two statements, please, from the Government? The first on the bus services across Wales that have been affected by the change in the default speed limit. There's an issue in my own constituency, in that the Arriva 51 service, which traverses rural Denbighshire, is axing its stop in the village of Llandegla, and it's a stop that is very important to those who use it; it's a lifeline, actually, for many people. And that service is going to be reduced, it's not going to stop, and the explanation that Arriva buses has given to local people is that that's because of the fact that the 20 mph speed limit change has added to the length of the journey that that bus needs to make, and it means that it's unable to stop at all of the stops it was previously able to service. Clearly, that's a concern for my constituents. I suspect it's happening in other parts of Wales as well—according to media reports that's certainly the case—and I do think it would be helpful to have a statement from the Deputy Minister for transport in order that he can address that particular issue and the local concerns.
In addition to that, can we have an update, please, on the delivery of the north Denbighshire community hospital? There have been some positive developments of late, in that I know there have been discussions taking place between the Betsi Cadwaladr University Health Board and, indeed, the local authority, Denbighshire County Council, and the Welsh Government, about getting that project back into the pipeline. It's over a decade since it was promised. We were told initially, when that promise was made, that it would be delivered within three years, by 2019. It's now 2024. We've just started the new year, and I think people in north Denbighshire, and, indeed, the other parts of the north Wales coast that that hospital could serve, are looking for some good news. So, I'd be very grateful if we could schedule an update on that particular issue as well, please.

Lesley Griffiths AC: Thank you. With regard to the first question around a statement in relation to bus services and the default 20 mph scheme, I think it's fair to say that the majority of buses probably didn't travel much faster than 20 mph. And, certainly, in my own constituency, where I've received concerns about that, I think it's fair to say that, perhaps, that is being looked at in a way that perhaps isn't correct, and I know that the Deputy Minister has been having discussions with Transport for Wales—sorry, with Arriva bus services, in relation to this. I know those discussions are ongoing. I appreciate that, for some bus services in Wales, cuts are having to be made, and, as you rightly point out, they are a lifeline for many of our constituents, and those discussions, I'm sure, will be ongoing.
In relation to your second point, again, I know there have been further discussions with Betsi Cadwaladr University Health Board and the Minister for Health and Social Services's officials. I will ask her—. I don't think it appropriate for an oral statement, but I will certainly ask her, if there is further information, to write to you.

Delyth Jewell AC: I'd like to ask for a written statement setting out the guidance that's given to councils on the importance of community assets and keeping those spaces open. In Caerphilly over the past week, there's been concern about a decision to close the tourist information centre. And it isn't just a tourist information centre,it's actually a very popular cafe, a hub for people in the area. The site also houses a gallery that showcases local art, and public toilets. It's a really important asset locally to the community. It has probably the best view of the castle in the entire town; it's great for attracting tourists. And there has been, I think, bafflement locally at how a decision like this could be made without notifying staff. This is a local decision—the Welsh Government has no bearing on it. I think it would be useful to set out a statement, showing what guidance could be given to councils, perhaps what support could be given to councils, to help ensure that community hubs like this can be saved, so that, as the Caerphilly Observer has put it, a value can be attributed to local amenities like this that goes beyond any number that could be added to a spreadsheet.

Lesley Griffiths AC: Thank you. I am pretty sure that guidance is provided in relation to community assets. You will appreciate the budget situation that we are all in, and I'm not quite sure if any financial support at all could be given. I will certainly—. The Minister for Social Justice is in her seat and will have heard your question. If there is any other type of support that could be offered, and that guidance could be updated, then we will certainly have a look at it.

Huw Irranca-Davies AC: This request has been raised before, but I make no apologies for raising it again, because it's an ongoing issue. I wonder if we could have a statement on the co-ordination of what's known as food waste, but it's actually food surplus, collection, distribution—jointly, actually, from the Minister for Rural Affairs and North Wales, and Trefnydd and the Minister for the Minister for Social Justice—to discuss and explore ways in which we can get more effective co-ordination of food collections from supermarkets and charitable organisations like FareShare to the food pantries, the foodbanks, Big Bocs Bwyd, and others, throughout my constituency and throughout Wales. There is such a great effort at community and voluntary level to ensure that food surpluses are not going to waste but are instead going to foodbanks like Bridgend foodbank for distribution, with vouchers, or to food pantries like Baobab Bach for distribution as exceptionally good-value bags of heavily discounted food, or the Noddfa in Caerau, selling discounted items, or pantries and kitchens combined, like Graham and the volunteers at CDT in Caerau, providing either affordable cooked food or ingredients, or actually a place where they prepare and cook the food for people. But they all face the problems of co-ordinating the collection, the distribution and storage of food surplus. At worst, we can end up with competition and inefficiency and waste of that food. So, could we have a debate or a statement on the role that Welsh Government can play in assisting these organisations to work together more effectively, and make the increasingly scarce resource of surplus food go to those who need it, and not to waste?

Lesley Griffiths AC: Thank you. I think Huw Irranca-Davies raises a very important point. As you say, I do work jointly with the Minister for Social Justice in relation to this area, but the Minister has really led, I think, having recognised the need for that co-ordination and leadership. She grant funded public bodies to establish local food partnerships, led by a local food co-ordinator. You mentioned several organisations in your own constituency; I'm sure we all can. Particularly in the run-up to Christmas—I'm very aware of the significant work that was undertaken in my own constituency, from supermarkets who then gave food 'surplus'—I think it's important to say that rather than food 'waste'—to organisations and to charities, to make sure that that food was shared as widely as possible. The Minister for Social Justice has pump-primed capacity in the way I explained, and I think those community organisations and those public bodies are well placed to take that work forward. There are a myriad of food-related initiatives in communities right across Wales doing good work, and I don't think the Welsh Government would be able to co-ordinate it perhaps in the way that you have said. But please be assured the Minister for Social Justice really leads on this area, and we do work with community organisations to build on that local partnership model.

Sam Rowlands AS: Good afternoon, Trefnydd. I'd like to call for a statement from the climate change Minister that outlines the expectations of using mandatory standards in housing developments and their associated infrastructure developments. I recently spent time with residents in Rossett in Wrexham, who I am sure you will know well too, who are concerned with a future housing development going ahead on the edge of the village. Their primary concerns are around flood risk. But aside from the flood risk, they've highlighted to me how, in a number of areas within the proposed development, mandatory standards as set out by the Welsh Government are not being planned to be adhered to. It seems to them and to me to be a contradiction to have mandatory standards that are not mandatory. So, I'd be keen to hear from the climate change Minister how she sees the use of mandatory standards in housing developments and their associated infrastructure, and whether they are actually mandatory or not.

Lesley Griffiths AC: Well, I think the Minister for Climate Change is very well aware of what is mandatory and what isn't, and it is a matter for local authorities, working with developers, to make sure that those mandatory requirements are adhered to. I'm very well aware of the particular issue that the Member has just raised, but I don't think it needs an oral statement, because that guidance, those regulations and that legislation are very well established.

Jane Dodds AS: Good afternoon, Trefnydd. I wonder if I could have a statement from the Minister for Social Justice in relation to the Bwndel Babi programme. It was very disappointing to see that the draft budget has cut, it seems, £3.5 million from the Bwndel Babi programme, a scheme that was piloted by the Welsh Government in the Swansea bay area in 2020, and was deemed very successful. The Minister expressed how she was delighted at the time, back in May, with the programme and how it was a universal gift. And it now looks as if it's going to be a more targeted approach in providing these bundles, which are really vital to everybody and shouldn't be targeted, but should be universal. So, I wondered if we could have a statement, particularly on the criteria and the eligibility for these baby bundles. Diolch yn fawr iawn.

Lesley Griffiths AC: Thank you. This actually sits in the portfolio of the Deputy Minister for Social Care, and she absolutely remains committed to rolling out the baby bundles to more families during this Senedd term. The reduction in budget has absolutely required us to reflect on our approach to deliver this programme for government commitment and ensure that it does reach families through the ongoing cost-of-living crisis. The Deputy Minister is currently considering a range of options for the delivery of the commitment next year, to ensure that more families in Wales have the essentials to provide their child with the very best start in life. The programme will continue to build on the success of the pilot, its evaluation and further scoping research will be undertaken to deliver positive benefits to new and expectant parents. So, whilst eligibility for a baby bundle is not yet agreed, we will, unfortunately, have to move to a more targeted approach going forward, to ensure those expectant parents in most need of support receive that support in the form of the baby bundle. The reduced budget will mean we will no longer be able to offer a bundle to all new and expectant parents across Wales. But I think targeting that approach will, hopefully, make sure that those people living or likely to live at risk of poverty—it will maximise the impact of that programme for those most in need.

Jack Sargeant AC: Trefnydd, I am seeking time to be made available to discuss the impact of the Post Office Horizon scandal on Welsh residents and the lessons to be learned. Sub-postmasters were wrongly sent to prison, they were made to pay back money they did not owe, they were bankrupt. So many lives ruined, so many livelihoods lost as well, and yet there still remains a number of serious questions to answer. Members may remember that I first raised this issue when the former leadership of the Football Association of Wales chose to appoint former post office employee Angela van den Bogerd. Thankfully, they changed their mind. But I've since been raising the issue in relation to how Hillsborough law could help ordinary people attain justice. For ordinary people to attain justice, Trefnydd, individuals need to be held to account. Now, obviously, I welcome Paula Vennells handing back her CBE this afternoon; she should never have been given one in the first place. But just because she's handed back her CBE does not mean she's been held to account. Neither does it mean Fujitsu executives have been held to account either. So, I'd be grateful for a debate in Government time to discuss this very serious issue on how we can make sure ordinary people do attain the justice and the truth they deserve.

Lesley Griffiths AC: Thank you. I absolutely share your concerns about the sub-postmasters and mistresses across the country whose lives have absolutely been ruined by this scandal. And, of course, the recent ITV drama Mr Bates vs The Post Officehas brought that back to the fore, I think, and really seized people's imaginations, I think, and perhaps people who weren't aware of the scandal before. Obviously, this is a non-devolved matter, but we know that there are people in Wales who have been and will continue to be affected by it, and you may have heard the First Minister say yesterday that we should have confidence in the public inquiry led by Sir Wyn Williams. However, I certainly agree that the matter of getting justice and compensation to those who are affected needs to be accelerated. It's taking far too much time.
I think the Member has been very diligent, Llywydd, in raising with the Counsel General the need for officials to be held to account for injustices faced by families who have been the victims of public sector failings, and it's hard to see how this could be delivered without the statutory duty of candour that is proposed by the Hillsborough Law Now campaign. Obviously, this is a matter for the Counsel General, and I will certainly ask him to update Members on what discussions he's had, because I think it would be something that would be better done on a UK basis.

Samuel Kurtz AS: Trefnydd, can I please ask for a statement from the Minister for Climate Change following the impact of flooding in my constituency of Carmarthen West and South Pembrokeshire? Like many parts of the country, the persistent and heavy rain that seemed to fall for much of the latter half of December on already saturated land caused severe flooding in parts of my constituency, with the arrival of storm Henk. In and around Tenby, including Gumfreston, Heywood Lane and the Clicketts, a red alert was issued for the River Ritec, indicating the chance of a loss of life, with water being described as 'jeep deep' on roads, cutting off routes for constituents. Also, the popular holiday park, Kiln Park, suffered its second record flooding event within 60 days.
Across the county border in Llansteffan during the same period, the residents of 21 properties were displaced when the Nant Jack stream overflowed and the culverts couldn't cope with the volume of rain. I saw for myself the Dŵr Cymru Welsh Water pump in the village of Llansteffan helping to reduce the flows of water to ensure the sewerage network wasn't overwhelmed. I'm sure the whole Senedd would join me in paying tribute to all those from local authorities, Natural Resources Wales, Dŵr Cymru and the emergency services for their work over the difficult flooding period. However, these flooding events are becoming more regular and are now affecting areas that are not usually associated with flooding. Therefore, can I ask for a statement from the Minister on what support is being made available to local authorities and NRW to mitigate floods and to help with the clean-up operation? And what lessons are being learned by the Welsh Government from the flooding of areas not normally affected by such floods? Diolch.

Lesley Griffiths AC: Thank you. Yes, the Minister will be bringing forward a statement either today or tomorrow—a written statement.

Janet Finch-Saunders AC: Blwyddyn newydd dda. Trefnydd, could I have a statement from you, please, in your capacity as rural affairs Minister about the razor clam harvesting ban in Llanfairfechan and Penmaenmawr? And can I, again, put on record my thanks to you? It was actually around 2018 when I first came to you and said that residents were really concerned about hundreds of people harvesting these clams. So, the ban has been in place now nearly five years. I wrote to you recently; the ban has gone up again for another 12 months, but you did write to me in 2022 stating than an assessment of the razor clam beds at Llanfairfechan and Penmaenmawr has not been completed and that surveying intertidal razor clams at Llanfairfechan and Penmaenmawr will require a novel methodology that is yet to be developed, and that officials will continue to consider and evaluate potential survey methods over the forthcoming year. Can you clarify whether a particular survey method has been selected, and when—? Residents are already asking me, 'What have been the benefits, Janet?' Whilst we wanted those beds closed, what have been the true benefits of doing that, which we believe are many? We need a survey, we need a review, or something. We need evidence to show how that has been effective. But, diolch again.

Lesley Griffiths AC: Yes, thank you. I will write to the Member with further information.

Y Llywydd / The Llywydd: Thank you, Trefnydd, for the business statement.

3. Statement by the Deputy Minister for Social Partnership: South Wales Fire and Rescue Service review of culture and values

Y Llywydd / The Llywydd: The next item will be a statement by the Deputy Minister for Social Partnership on the South Wales Fire and Rescue Service review of culture and values. I call on the Minister, Hannah Blythyn.

Hannah Blythyn AC: Diolch, Llywydd. In December 2022, ITV News ran a story exposing serious misconduct by staff of the South Wales Fire and Rescue Service. It included a case of gross and prolonged sexual harassment by a firefighter towards a colleague at a fire station in Cardiff and a case of a firefighter convicted of domestic violence. In both cases, the response of management was wholly inadequate. Neither firefighter was dismissed or even suspended at the time. This compounded the suffering that their victims had experienced, and it also suggested serious problems with the service's corporate culture and values.

Hannah Blythyn AC: Immediately following the ITV report, I met the chair of the South Wales Fire and Rescue Authority and made clear to him the need for a thorough independent review of the service. He agreed to do so, and Fenella Morris KC was subsequently appointed to lead that review by the FRA. Fenella Morris KC spent most of last year gathering evidence and interviewing current and former staff members and others. Llywydd, I want to pay tribute to the individuals who have come forward and given evidence of the abuse, mistreatment, misbehaviour and mismanagement that they have suffered and witnessed. The courage that this has taken should not be underestimated. Without them, nothing might have come to light and nothing could now change—thank you.
The report was published last week on 3 January, and it is, in a word, damning. The headline finding is that discriminatory attitudes and behaviours exist at all levels up to and including senior management. It would be too simplistic to focus on the specific instances identified in the report, shocking and horrific as they are: misogynistic remarks excused as banter, sexualised images of staff in uniform, homophobic Christmas decorations or firefighters being forbidden to take the knee. All of these are, of course, repugnant and reprehensible. Those responsible for them have brought disgrace to the service and tarnished the high regard in which firefighters are rightly held.But the report also finds serious underlying problems: a boys' club exists within the service, especially within senior management; there is widespread staff discontent and demotivation, and a belief that nothing will ever change; promotion arrangements are widely believed to be subject to bias and favouritism; disciplinary procedures too often lead to inadequate sanctions or no sanctions at all; key human resources policies are out of date, inadequate or concerned more with protecting the reputation of the service than the rights of individuals; and the firefighting workforce remains overwhelmingly male and white, with little effective progress in addressing that. In short, there are many serious, long-running failures of management within the service.The norms, rules and processes that should exist within any well-run organisation appear to be missing or ineffective. That may well contribute to the incidents of misconduct that have been identified. If senior management operates in an autocratic way, if promotion depends on who you know, not how good you are, and if behaviour such as fighting on duty or posting hateful and discriminatory comments online is punished only with a warning, then it is unsurprising that those who are motivated to misbehave think they can get away with it. And, sadly, it is also unsurprising that they did get away with it. 
When I met the chair of the South Wales Fire and Rescue Authority yesterday, it was clear that he is taking the report seriously and accepts the recommendations in full. But that can only be the start of a long process of reform and cultural change. And I am far from convinced that the authority alone is capable of designing, overseeing and implementing that process. To be clear, the issue is not whether the Welsh Government becomes involved, but how and to what extent. In particular, I will need assurances on three issues. Firstly, how can sustainable change take place when so many of the existing management structures and practices have been implicated in failure? The retirement and replacement of the chief fire officer is nowhere near sufficient to stimulate and embed the degree of cultural change that is necessary; I will need to be assured that the capacity, capability and willingness to complete that change programme is in place.
Secondly, there is a danger that the identified failures might also affect the delivery of front-line services. Individuals who assault, bully, harass and victimise their colleagues are palpably unfit to discharge duties relating to public protection. Staff who experience or witness this kind of treatment, or who see promotion based on nepotism not merit, are very likely to be demotivated, mismanaged and badly led. And an organisation that tolerates such misconduct may be complacent and likely to accept other forms of bad practice too. If the South Wales Fire and Rescue Service's ability to discharge its core functions has been affected, then that would clearly be a very serious matter indeed, and I will need very clear assurance about that.
Finally, we need to understand the role of the fire and rescue authority in all of this. This report relates to failures of officer-level management, and it would be unfair to expect the authority members to be fully aware of every detail of management practice. But the authority is nonetheless the employer and the statutory body. It should show clear leadership and hold management to account. I am not convinced that it has done so.
I will be considering how the governance of the authority might be strengthened to oversee sustainable change and prevent a recurrence of these failures. I will reflect on all these issues urgently in further discussion with the authority and others, and I would urge our other fire and rescue services and, indeed, other public services to read and reflect on the report as an example of how badly wrong things can get if issues of good governance and management are neglected. But, to be clear, I am ruling nothing out in terms of Welsh Government support, direction or intervention in the South Wales Fire and Rescue Service. We simply cannot accept this level of discrimination and mismanagement in a public organisation charged with protecting people from serious harm. Llywydd,I will make a further statement to the Senedd as soon as possible. Diolch.

Joel James AS: Can I thank you, Deputy Minister, for your statement today? As you have mentioned in your statement, the report makes for some very alarming reading, and it is disappointing that south Wales fire and rescue, which I believe, until recently, had such a positive public image, has been found to treat some of its staff in such an appalling way. This report reflects very badly on the whole of the executive leadership team, who, by all accounts, must have, at worst, been supportive of the working culture, or, at best, turned a blind eye to the conduct of many members. It's been widely reported in the press that Huw Jakeway has decided to retire from the service following this report, and I wonder, Deputy Minister, what steps you are now going to take to hold those whose job it is to prevent such misconduct accountable. Do you think that it is right that they remain in their posts, as I know of no such organisation that would have tolerated a senior leadership team with such a woeful disregard for the well-being of its staff?
Turning to the report itself, there are a few points that I feel need addressing. The first is that only 25 per cent of staff responded to the independent survey, and this in itself is a finding that needs to be investigated further. Is the lack of trust so endemic that 75 per cent of staff would not even go on anonymous record to express their views? I find it difficult to believe, Deputy Minister, that if the staff had an overwhelmingly positive view of working for the South Wales Fire and Rescue Service they wouldn't have come forward and expressed it.
Sadly, I've been contacted by several ex-employees of south Wales fire and rescue who have had an appalling experience working with the service. In particular, they outline that the complaints procedure is fundamentally not adhered to in the sense that they claim the service does not follow its own procedures properly and neglects to investigate serious allegations of discrimination and bullying behaviour. They also point out that when an allegation is raised against senior staff, the case is not investigated in an impartial manner. The investigative panel that is appointed for stage 2 is made up of one director and two heads of department. Each department head is connected personally to one another, since they all appear to socialise together. Moreover, once the internal process has been exhausted, which involves only one grievance meeting and appeal, the service will not allow staff to pursue this matter any further and they close the case. Deputy Minister, do you believe this investigative process is adequate to meet the well-being aspirations of staff?
In light of the serious accusations that have been made, Deputy Minister, of nepotism and a lack of openness and transparency, the fact that there were significant responses from staff who said that managers either never or rarely set the right example about how to behave respectfully towards those with the protected characteristics of race, religion, gender or sexual orientation, and that almost half of respondents—46 per cent—would not recommend the service as a place to work because of its culture, will you put on record that you will make a commitment to reopen complaint cases over the last decade to ensure that a robust evaluation was made and that proper procedures were followed? In light of these findings, I believe that we owe staff past and present that respect.
Second, Deputy Minister, it is clear to me from the report that there's an abject failure of the disciplinary process, which has clearly put some staff in a very difficult position. The results of the investigation show that when inappropriate comments were made, staff felt powerless, because they had only two options available to them: either they to take no action and live with the future comments and jokes at their expense, or start, as the report highlights, a heavy-handed complaints process that not only resulted in little to no action being taken, but also impacted on the positive aspects of the working relationships that they had and their career opportunities, because they would be identified as a troublemaker. It is also clear to me in this report that new procedures have to be designed that are more nuanced and allow for arbitration, a reconciliation between staff without necessarily having a formal complaint made. Is this something you agree with, Deputy Minister?
And finally, I would like to know how you intend to proceed with the other fire services in Wales, and whether you believe that other services should also have an independent culture review. Thank you.

The Deputy Presiding Officer (David Rees) took the Chair.

Hannah Blythyn AC: Can I thank Joel James for his contribution today? You shine a spotlight on many of the concerns raised through the report and the review, and also the recommendations for wider cultural and procedure and systematic change that Fenella MorrisKC and the team involved set out, and, as you say, it is 185 pages of very difficult and distressing reading. I first had access to read the report on its publication last week, on 3 January, and, since then, I’ve read it again, and I read it again last night, and I think, each time I read it, it gets significantly more difficult to do so, but that should be the spur for the change that we know that we need to see.
If I touch on a number—. I’ll try and touch on what I can in terms of the points that you raise today, Joel James, in order to say that your contribution very much chimes with the recommendations made in the review and the need to move forward to make sure those recommendations are—[Inaudible.]
In terms of other fire and rescue authorities, as I said in my statement, whilst this review applies specifically to South Wales Fire and Rescue Service, I would expect other fire and rescue services and other public bodies to actually read and reflect on those recommendations. We know there’s been previously His Majesty’s inspectorate—relating to England, not applying to Wales—in fire and rescue authorities in England, and, when that was published, both myself and our chief fire adviser in Wales have been in correspondence with fire and rescue authorities in Wales with regard to actually how they meet assurances set out in those recommendations as well. So, it’s something we’re clearly very mindful of and very much on.
With regard to—. You talk about the current and former South Wales Fire and Rescue Service employees coming forward, and, again, I have, like many Members here, been approached directly or through other Members of the Senedd, and made sure that those people were able to take part in the process of the review, if that was possible, and very much recognisewhy people are deeply and understandably distressed about the treatment that they have received during their appointment, which, as you pointed out, Joel James, fully bears out in the conclusions on the need for robust action, and I would expect grievances like this to be reinvestigated properly so that the individuals concerned rightly receive the fair and just outcome that they may have been denied previously.

Sioned Williams AS: This report is a really tough read, and I appreciate the forthright response that we’ve had from the Government today. The testimonies from members of staff are heartbreaking at times, but they’re also essential in highlighting the unacceptable behaviours, practices and culture that have been allowed—allowed—to grow within South Wales Fire and Rescue Service.
‘It’s a man’s world’, says one testimony, and indeed the report speaks about a culture where sexist comments go unchallenged, inappropriate advances are made towards women, women are questioned whether they’re fit to carry out the job, women are silenced, and, in one extreme example, a male firefighter refused to speak to or even acknowledge women. And the report itself states that, sadly, this list is not exhaustive.
It’s also clear men are victims of this culture too, be that as a result of race, religion, sexual orientation, disability or simply, as you stated, they don’t have the right contacts within the service.
Tackling this toxic culture is about making the service fairer for everyone: for the people who work in the service, for the members of the public who are served by the force, and for those who might be thinking about starting a career in fire and rescue, and Plaid Cymru would like to make it clear there’s no place for any such culture in any part of our society, including our public services. The recommendations within this report must be implemented urgently, and, importantly, to the highest standard possible, because a failure to do so will only allow this unacceptable behaviour to continue, to the detriment of staff and the public alike.
The report concludes that everyone should be working together to achieve the goal of a modern culture within the service. So, my question is: what work is going to be done by the Welsh Government to ensure that the victims are being adequately supported, that the fire and rescue profession is a safe one for those with protected characteristics to join, and that the public, especially women and people with protected characteristics, have confidence and trust in the service?
As regards your response as to whether there will be a review of other fire and rescue services across Wales to highlight if this type of culture or type of behaviour exists within them too, well, we know that similar issues have been highlighted in a number of services in England, so do you agree, Deputy Minister, that it would be prudent to carry out the same sort of independent review of culture and values across the other two fire and rescue services in Wales, and, if available and for consistency, that the same team could be considered?
Staff deserve to work in a safe environment and to know that any behaviour of the frankly horrifying sort described in the report will be dealt with appropriately. Because what we've seen is a situation where a number of cases were not fully investigated, individuals were easily able to escape accountability—either by moving to other roles or retiring with full pensions—instances of misconduct were simply swept under the carpet. The review was very critical of the senior leadership team, and, despite the chief fire officer stating he'll step down, all other members of the senior leadership team remain in post—and many of those in management roles during the period of the review. We've also seen the chief fire officer receive a £12,000 pay rise during the period of the review, which brings into question the scrutiny being provided by members of the fire authority. So, will there be a review now led by the Government of how this has happened, and—? Because this is, as I'm sure you would agree, an absolute insult to all of the victims who have come forward during the period of the review to raise issues. And who is going to oversee the implementation of the recommendations? We heard the First Minister talk earlier about the need for managerial change, so can you explain to us what that looks like?
As the report itself states, do you agree that there should be provision also to pursue action against any officers who have left the service if any allegations of misconduct can be proven? Because this is surely crucial, both to restore public confidence and trust in the service, but also, importantly, to send a clear message that this type of behaviour in the workplace will not be tolerated. It would also ensure accountability for those who have been victims of harassment or abuse. So, will the Welsh Government intervene to ensure those who have been allowed to leave without action being taken against them are held accountable for any proven misconduct? As without action and without consequences this type of toxic culture could continue in our services and institutions. Diolch.

Hannah Blythyn AC: Diolch, Sioned Williams, for your contribution and for the very many important points that you made during that contribution, which I wholeheartedly agree with, as you would anticipate. You raise a number of key concerns and key issues that this review has raised and that will need to be acted on appropriately, robustly and as efficiently as possible.
In terms of the other fire and rescue services, if I could touch on that point initially, I think I said in response to Joel James, actually, in light of the—. Actually, first of all, I'd like to again pay tribute to the people that came forward and actually spoke out. It shouldn't be the case that they should have to speak out, that shouldn't be a culture that is able to persist and be permitted, but I'm grateful that they have done that to enable us to shed light on this issue, and actually hope we move things forward and achieve the change that we all want to see, and you're right in terms of saying the report recommends that everybody has a part to play, and this will be a collective effort. So, depending—. There will be a role for Government, whether that's through support, direction and intervention, but also working with partners in the WLGA and across public sector life as well, and I'm more than happy, like I said, to update the Senedd as appropriate, but also to work with spokespeople here in the interim to update on the progress of the work that we're doing.
In light of the ITV story and the wider concerns about culture that were raised back in December 2022, since March 2023, we have received regular anonymised reports about gross misconduct cases from all three fire and rescue services in Wales. They feel that cases across Wales are generally dealt with appropriately by management. South Wales Fire and Rescue Service, however, has had a tendency to downplay such conduct—for instance, only issuing written warnings for conduct that should probably lead to demotion or dismissal—and that fully reflects the finding of the review.
As I referred to, there was—. His Majesty's Inspectorate of Constabulary and Fire and Rescue Services had a report based on—. You referred to services in England that had had similar inappropriate and ineffective management exposed. Whilst their remit didn't cover fire and rescue services in Wales and its March 2022 report wasn't based on any evidence from services here, nonetheless, on the back of that, we asked all three services to implement the recommendations as a minimum, and we continue to hold them to account for doing so. So, we'll continue to scrutinise that, but, as I said, I will be meeting with all fire and rescue services about the recommendations of this review and how they hold them to account, but this is something that will be closely monitored and worked collaboratively on. And as I said, we're ruling nothing out at this stage and it's not a question of whether we become involved but what form that involvement takes and how appropriately and effectively we can collaboratively achieve that meaningful change that not only communities deserve from our public services but the people who work within our public services as well.

Vikki Howells AC: Thank you, Deputy Minister, for your statement here today. I am glad to hear that you are taking the findings of this independent review so seriously. The report made for absolutely shocking reading, and it is clear, as you say, that a long process of reform and cultural change must lie ahead. Part of that change must lie in the recruitment and retention of new firefighters to the service—new firefighters who come from diverse backgrounds, who can both benefit from and help drive this cultural change. Now Deputy Minister, I've raised in this Chamber previously my concerns around the difficulty of recruiting and retaining on-call or retained firefighters within south Wales fire and rescue. So, how can Welsh Government ensure that this report does not act as a further barrier to recruitment and retention?
Secondly, I note the response of the WLGA to the independent review. In their response, the WLGA set out many of the same expectations that you have set out here, and their own intention to scrutinise the work of the service and the authority to meet the recommendations set out in the report. Therefore, Deputy Minister, what capacity is there for Welsh Government to work jointly with the WLGA on this, to present a united front from the public sector and ensure that the reform happens swiftly and thoroughly?

Hannah Blythyn AC: Can I thank Vikki Howells for her question? I know that your commitment in this area is one that you are very—for want of a better word—committed to. Just on the point of diversity as well, I think that's a really important point. It's something that was really stark during the course of the report as well. I agree with the report that a lack of workforce diversity contributes to the problems that the report has highlighted, and it makes it harder to build inclusiveness and may, sadly, increase the risk of bullying and harassment of those who do not conform to some pre-existing stereotype. The firefighting workforce remains overwhelmingly male, even more so than other historically male-dominated sectors like the police and the armed forces. So, while there's no quick answer, it is part of what we need to do now in terms of actually how we work with partners to actually break down those barriers and create a more inclusive environment. I do know—. Back over a year ago, I met with some new recruits in the North Wales Fire and Rescue Service and that group were 50 per cent made up of women. That was on the back of conscious efforts by the North Wales Fire and Rescue Service to encourage women to apply, with very targeted recruitment campaigns using relevant role models.
So, it can be done, but, actually, once people are in there, we want to make sure it is an environment where they feel safe, supported and wholly included, which brings me to the points you've raised previously, Vikki, around recruiting and retaining particularly on-call firefighters. In the report, there's no evidence of a direct connection to that. I know Fenella Morris KC in the report does touch on perhaps sometimes retained firefighters not feeling that they're respected in the same way as perhaps whole-time firefighters. But I think the problem with recruitment and retention of on-call firefighters, as I said to you before, is a problem across the UK and probably reflects wider changes to the rural economy and declining incident volumes, which might make the necessary time commitment harder to justify. But I think, importantly and worryingly, the problems that are identified in the review—. I think we can deduce that they may well have induced some staff to leave, and I wouldn't be surprised if that was the case, and I don't think any of us would, and there is concern, of course, that any reputation for mismanagement or for the things that this report highlights might deter others from joining. So, the culture review and acting on those recommendations is not just important for those that have worked in the service and continue to work in the service, but is highly important for the sustainability of the service and for it serving communities across the south Wales area as well.

Delyth Jewell AC: There is similarity here, of course, with the problems that were unveiled about Gwent Police, but unlike the police, of course, this is a devolved service. I welcome the tone that you've adopted this afternoon, but I'd question why we had to rely on a brave whistleblower to draw attention to this problem, rather than the Government, which oversees this service, finding this information. What changes in processes will need to be seen to ensure that this doesn't happen again? Does the Government believe that the decision to award a pay rise of £12,000 to the chief fire officer is deserved? Or is that some sort of insult to the victims? I'm aware that the Fire Brigades Union has drawn attention to the fact that the review was very critical of the senior management team, but only one of those have said that they will step down. So, will there be a review of the decision to award a pay rise, and who will be overseeing how these recommendations are implemented, please?

Hannah Blythyn AC: Diolch, Delyth Jewell, for your contribution. I think I caught most of it, but my audio was going in and out, but hopefully I caught most of it. With respect to how we found out about that, and it is with great sadness, and again I absolutely pay tribute and recognise the bravery and courage of the people who have come forward, but it should not be the case that people have to whistleblow and to take those actions for the necessary action and response to be made. It should be something that we should expect as par for the course across society, but more so, I think we should rightly hold our public services to higher account as part of that.
Normally, there would be no need for cases of individual misconduct to be reported to Government, and they can and should be left to employers to deal with, but, as we've seen in the highly critical report, it identifies not just those unacceptable behaviours and attitudes, but underlying failures in leadership, governance and decision making by management at all levels of the South Wales Fire and Rescue Service. And whilst it is a devolved public service, the Welsh Government doesn't directly run that service and, normally, you would expect fire service management to manage their staff fairly and well, and we expect fire authority members to show leadership and to hold management to account. And, where that doesn't happen, there's a case for Government to become involved. As I said, we knew nothing at this stage, and I do have concerns about the capacity and capability for this situation to change and achieve that meaningful culture change without intervention and the support of Welsh Government as part of that as well.

Y Dirprwy Lywydd / The Deputy Presiding Officer: And finally, Joyce Watson.

Joyce Watson AC: Diolch, Dirprwy Lywydd. I thank you for your statement today, but I have to say, having worked with South Wales Fire and Rescue Service for many years on the White Ribbon campaign, I feel deeply disappointed and appalled by the failures identified within that report. Some of the questions that it raises are very obvious, and that's public trust in this service, and the failings are letting down the many trustworthy individuals who work within this service, and the suspicion that falls on everybody.
I feel very strongly that anyone who has been found guilty of gross misconduct, as highlighted, through abuse, intimidation or harassment, should immediately be sacked, and we need to remove those people from their posts before we can go on to protect the people who are there. I think that we've had far too many examples within public sector, from the police, the Welsh Rugby Union, the NHS, to not actually say now that the systems that people are relying on to report are deficient, that the procedures are not adequate. And I think it's time—and I hope you will, Minister—to put public services on red alert now that we will be looking at their systems and their procedures that protect those people who want to make a complaint, so that they feel that they can make a complaint in a way that doesn't jeopardise their family, their income, their status, and instead protects all those things within the institution, not the individual.

Hannah Blythyn AC: Thank you, Joyce Watson. You make the point about how such reports and reviews make such difficult and distressing reading that it does then cast a shadow over the service as a whole. I hear your disappointment in the work that you've done, which I know you're a passionate advocate of across the piece, around the White Ribbon campaign, and I know that the South Wales Fire and Rescue Service were at the forefront of many of those campaigns, and, actually, in the review itself it does recognise that, but it also recognises how whilst there had been that commitment at, perhaps, a corporate level, perhaps that hasn't actually mainstreamed across the culture of the organisation and that hasn't been effectively communicated and then reflected in the procedures and the systems of the organisation as a whole.
You're right, there are far too many examples, and quite frankly I'm tired of talking about this now, and that's why we do need to act. The point you made, yes, my priority is to take the necessary support and action we need in terms of what the review has revealed with regard to the South Wales Fire and Rescue Service, but there is also—. I want to see that wider change and to work collaboratively with all partners and stakeholders to ensure that we can make sure, to the best of our abilities, where we have the levers and we have the powers, to make sure that, actually, our public services and our public sector in Wales can be a beacon of inclusivity and support, not just for our workforces, but as I said, for the communities in which they're placed and they serve as well.

Y Dirprwy Lywydd / The Deputy Presiding Officer: Thank you, Deputy Minister.

4. Statement by the Minister for Economy: The compound semiconductor industry

Y Dirprwy Lywydd / The Deputy Presiding Officer: Item 4 this afternoon is a statement by the Minister for Economy: the compound semiconductor industry. I call on the Minister for Economy, Vaughan Gething.

Vaughan Gething AC: Diolch, Dirprwy Lywydd. I'm delighted to make this statement today about the compound semiconductor industry here in Wales. Substantial and significant growth has taken place, and I'm proud of the role that the Welsh Government has played in creating opportunities for Wales.
In November, I launched 'Economic mission: priorities for a stronger economy'. Our aim is to set Wales on a path to deliver a fairer, greener and more prosperous Wales. This industry is a prime example of how we're using active industrial policy to position Wales as a partner in the wave of new industrial strategies that are redefining economies around the world.
My approach touches upon many of the portfolio areas across the Welsh Government in addition to my own portfolio. We are investing for long-term growth, focusing on our comparative strengths to boost investment, providing opportunities for young people, and promoting fair work.
We're committed to working in partnership with industry, academia and especially the Cardiff capital region to help further grow the semiconductor sector. Our partnership is well understood and respected by industry across the UK and indeed by global markets. Our semiconductor sector is a success story that is helping to shine a spotlight on Wales.
Of course, I make this statement against the backdrop of a difficult budget settlement that demands an even greater sense of priority. It means backing those proposals that are built to last with long-term partnerships and creative approaches that will deliver a return on investment.
Semiconductors are an essential technology to support our daily lives, as indeed we found out yet again during the pandemic. Overnight, the world of work became largely virtual and totally reliant on computers, telecomnetworks, and the internet. Indeed, even the medical equipment in our intensive care units were underpinned by semiconductor technology.
Compound semiconductors, the segment that the industrial and academic cluster in south Wales specialises in, are at the leading edge of this technology. They, of course, have capabilities that go far beyond silicon chips. They're driving the development of electric and autonomous vehicles; they're the technology behind LED lighting and solar cells; and they're essential in today’s 5G and tomorrow’s 6G mobile networks.

Vaughan Gething AC: There is probably a piece of Wales in every mobile phone in the world. It could be the facial recognition sensors, with material grown by IQE in St Mellons, or because of goods made using equipment built by KLA in Newport.
The Welsh compound semiconductor cluster is at the heart of the technologies that will help all of us to address many of society’s key challenges, from future medical advances to the power management and energy generation that will help us to deliver on our net-zero commitments.
But the Welsh semiconductor industry is not just good for the challenges we face as a society; it is also really good business. This is a high-growth industry that is export led. The Welsh cluster exports more than 95 per cent of its products, not just to Europe, but globally. It contributes close to £0.5 billion in exports every year, and that's around 3 per cent of all Welsh manufacturing exports.
And this is a research and development intensive industry. Every company in the cluster has a dedicated R&D department, and the close working relationships with our three local universities is a model for other industries to follow. The cluster has been behind Wales’s success in winning more R&D funding from UK sources. This has been recognised by the establishment of the UK’s public research centre for semiconductor applications, CSA Catapult, which is based in Newport.
This focus on R&D aligns well with our own innovation strategy, 'Wales innovates: creating a stronger, fairer, greener Wales', which I launched last February. It calls for innovation to drive growth and collaboration for solutions to society’s challenges and for citizens to share wealth through fair work.
I challenged organisations to develop larger and more compelling R&D proposals to leverage greater support from UK funding sources. The semiconductor cluster has risen to that challenge. Acting as a consortium, they've secured many collaborative research grants. One of the most substantial was a £42 million Strength in Places Fund award, supported by 10 Welsh organisations.
Our economic mission calls for Wales to be outward looking, to demonstrate our strengths, to win investment and to attract talent from around the world. In the past year, the Welsh Government has participated in semiconductor industry events in California, Japan, Taiwan and Germany. The recognition of the Welsh cluster has been clear and apparent in each market.
In just the last two years, we've won investment from Siemens in Germany, MaxPower and MicroLink Devices from the US, and Rockley Photonics in the UK. I'm delighted that our direct discussions with Vishay Intertechnology of the US have helped lead to their agreement to acquire Newport Wafer Fab. And, of course, the new European manufacturing and R&D centre of KLA is taking shape at Imperial park in Newport, a $100 million investment, creating a 200,000 sq ft facility with hundreds of high-salary jobs to be created in the next few years. We continue to discuss investment opportunities with several other global companies that I expect to announce during the course of the year.
This successful industry is already having a significant impact on job and career opportunities for the people of Wales. In just 10 companies within the cluster, direct and indirect employment increased 9 per cent last year to more than 2,600, and we know, across the wider sector, there are many more jobs here in Wales. And these are high-calibre technical and engineering jobs, as well as the head office functions that support them. To continue to grow good jobs, we need to ensure that our young people have the right skills, and we are already offering apprenticeships for graduates.
For example, there are established industry relationships to test and scale up within Cardiff and Swansea universities. At the University of South Wales, a degree apprenticeship in semiconductor technologies is being delivered. All of this is excellent news for young people and growing the economy of Wales.
Future talent is the No. 1 issue for the industry globally. A nation that demonstrates current and future talent in their people will attract and retain further investment, as well, of course, as equipping its people with the skills to develop a career, wherever they choose in the world. This underpins my decision to work with the UK Government and local partners to develop an investment zone for south-east Wales. This was selected on the basis of its high-potential compound semiconductor sector. The £160 million investment between the two Governments could help to catalyse this high-potential, knowledge-intensive industry over the next five to 10 years. It will support industry, enable infrastructure, and the skills that will support its growth and prosperity. I expect to see proposals coming forward from the south-east Wales joint committee containing ambitious plans to help grow the sector using the levers available.
I also expect to see, in the coming months, clarity as to how the UK semiconductor strategy will support the south Wales cluster. This high-level strategy, and the funding apparently announced alongside it, must translate into tangible support to help tap the undoubted potential that we possess here in Wales. The compound semiconductor cluster that we have supported over this last decade illustrates many aspects of our economic mission and this Government's economic priorities. Our long-term approach will support sectors that deliver against our aims, where Wales's acknowledged strengths can help to generate economic impact. That means, simply, more jobs and better jobs. I intend to continue to use all the levers at our disposal to support this partnership to deliver on our ambitions, to help grow the sector and create even more good jobs for the future. Diolch.

Natasha Asghar AS: Thank you for the statement this afternoon, Minister. The semiconductor sector is incredibly important, and as a born-and-raised Newportian, I am proud that Newport sits at the very heart of the cluster that you mentioned. As you said, KLA's operation expansion in Newport—a move that will create hundreds of new jobs—is absolutely welcome news, and I very much look forward to hearing more about the future investment opportunities the Welsh Government expects to see in the coming year.
Equipping our young people with skills is absolutely essential when it comes to the growing sector. I know you touched on Cardiff and Swansea universities within your statement, but I'd like to know specifically, Minister, what work will the Welsh Government be doing with colleagues and the regional skills partnership to ensure that the cluster has access to the skills that businesses actually need to grow and develop the sector further.
I have absolutely no doubt that the UK Government's national semiconductor strategy will support the south Wales sector and help secure the UK's position as a global science and tech superpower. The strategy will also see the Government invest up to £1 billion in the next decade, and up to £200 million between 2023 and 2025. These are just some of the many steps the UK is taking to support the semiconductor sector and industry.Minister, what discussions have you had personally with the UK Government in relation to the strategy?
News of Vishay's takeover of Newport's Wafer Fab is absolutely welcome, and hopefully marks the end of a particularly uncertain time for its staff. I was delighted to meet with the Nexperia Newport staff association before Christmas here in the Senedd, and I must say a huge congratulations to my colleague Jayne Bryant for organising such a wonderful event. It's clear that they see Vishay's investment as a huge sign of confidence. So, I'd like to know if you've had any recent conversations with the UK Government about this matter specifically.
The Department for Science, Innovation and Technology has established a semiconductor advisory panel, made up of industry experts, to help grow the sector. So, Minister, what engagement has the Welsh Government had, if any, with the panel itself, and have you given any consideration to setting up something similar here in Wales? Late last year, the UK Government also launched its ChipStart programme, which provides start-ups solving complex issues through the design of semiconductor chips with support to grow. Twelve companies have joined the scheme, which will ultimately equip them with the technical as well as commercial help that they need to get their new products into the market. So, Minister, how is the Welsh Government linking into that, to help the sector grow further right here in Wales?
I'd also like to know what funding the Welsh Government is providing to start-ups going forward. There is, hopefully, a lot to be excited about, and I know you've been jet-setting here, there and everywhere on various trade missions, but what else is the Welsh Government doing to attract investment into Wales? And whilst you're on these trade missions, Minister, I'd really like to know, sincerely, what best practice you've learnt from these countries so far. Thank you so much.

Vaughan Gething AC: Thank you. I'm happy to reiterate to the Member that the regional skills partnership, CSconnected and the wider region do have a properly joined-up approach. They recognise, across all those areas, the potential for further growth in this sector. And one of the opportunities we have is that, at the moment, the cluster is relatively unique in the compound sector. The challenge, and the risk, though, is that the rest of the world won't just stand still, which is why we need to get more investment into the sector. It's why I place such a high priority on our relationships between the Government, the capital region, and, indeed, the industry itself. It's why I've directly met a number of companies in the sector, and it's why, on the limited number of trade missions I've attended, compound semiconductors have often been part of the conversation.
When you look at the points you made about the UK strategy, I appreciate why you're as positive as possible about the strategy. It took a long time to get there. It's a simple truth that the churn in UK Ministers, from the start of saying there would be a strategy to when it was actually announced, is one of the problem factors we've had. And if you're having an honest conversation with a UK Minister, you'll probably recognise that some more stability would have meant the strategy would have happened earlier.
The other challenge is the resource around it as well. Because £1 billion over 10 years isn't a significant amount of additional capital on its own in a sector that is hungry for resources but also should demonstrate a really significant return. I'm afraid to say that, at present, there's no new money that is visible to me as a result of the strategy here in Wales. Yet actually, if the strategy is to be a success, to help grow the sector, as people across this Chamber, and others, would want to see, I don't see how you can do that without seeing investment come here to Wales, because of our established strength within the UK and our global recognition.
In terms of conversation with the UK Government, I think we're potentially in a better place. My conversations with the previous Minister, Paul Scully, were disappointing, and when he previously said, and went out of his way to say, that the UK Government weren't interested in creating Taiwan in south Wales, that was incredibly unhelpful, and it was not well received by academia, industry or the cluster. I'm hoping there can be a more purposive partnership with the UK Government. My decision around the investment zone and prompting that this was the area that I want to focus on in south-east Wales is designed to help us get to the same place, where there is a growth sector that is recognised and practical support provided to it. If and when there is more than just warm words, I'd be more than happy to update you and the wider Chamber.
I'm very pleased, though, to hear you recognise the work of Jayne Bryant with the staff association at Newport Wafer Fab. It's really good news that Vishay have put in a proposal for purchase. I look forward to seeing the fruition of that. When it comes to the expert panel around the UK strategy, the chief executive of IQE is on that panel, and he shares similar ambitions to the Welsh Government about wanting to see a strategy that helps to lever in additional investment and an open-minded approach from the current and a future UK Treasury about the amount that it's prepared to invest to deliver even greater investment. And we will continue to maintain the established relationships that we already have. And I think, actually, because of the presence of CSconnected, and indeed wider semiconductor businesses and sectors that rely on them in the rest of Wales, we don't need to create that same panel, because we in essence already have it, which brings together industry, academia, and indeed our different regions of Wales and the Welsh Government. It's a model that the rest of the world are looking to replicate. So, let us take advantage of our current position, and take full advantage for people and future jobs here in Wales.

Luke Fletcher AS: I thank the Minister for his statement. The semiconductor industry is a crucial part of the global economy, and it's good to see that south Wales is home to one of those clusters for innovation that the industry relies on. One element of the statement that stood out for me was what the Minister said around the need to continue to grow good jobs and ensuring that our young people have the right skills. As he stated, future talent is the No. 1 issue for the industry globally. So, how do we square this then with what we are seeing with apprenticeships in the draft budget? The Minister had much to say before Christmas about young people's future being a priority. He mentions his strategy again today. But we see a proposal for one of the biggest cuts to apprenticeship funding since devolution began. Those who deliver apprenticeships have been clear in their concern about what this will mean for the future.
We know that a skills gap exists and that it needs to be addressed urgently. We know that it's slowing down economic development. The Institute of Physics tells us as much in a recent report on the semiconductor sector, highlighting that two thirds of physics innovators across the UK and all sectors reported suspending or delaying innovation activities because of skill shortages. Apprenticeships provide a viable solution to the skills gap. Again, the Institute of Physics tells us that more than 50 per cent of physics-related roles in the UK typically don't require a degree, such as within the semiconductor industry. So, given the threat to apprenticeship funding, how will the Minister ensure that routes are made available to young people to help bridge the skills gap in industries such as the semiconductor industry?
The Minister also mentioned research, development and innovation in his statement, and it is vital for a productive and resilient economy, but Wales is consistently near the bottom for RD&I spending in the UK. In its recent submission to the Economy, Trade and Rural Affairs Committee on research and development, Cardiff Metropolitan University emphasises that every £1 of public spending on research, development and innovation eventually stimulates £2 of private sector spending. Cardiff Met also says that in all but two funding streams Wales's 2023-24 allocations are lower than the Reid review recommendations. I raised this issue almost exactly a year ago today with the Minister during his statement on developing technological clusters here in Wales, yet the same issue remains.
If Wales was able to achieve parity in RD&I funding and the Welsh Government committed to further financial investment through the innovation strategy into higher education research to support areas of work such as the compound semiconductor industry, the pace of development of the industry in Wales, our global competitiveness and the benefit to Welsh workers and the Welsh economy would be greatly increased. Therefore, will the Minister outline the Welsh Government's plans for the £3.2 million of consequential funding to be received following the UK Government's university innovation fund increase in November? And would the Welsh Government consider using funding from this consequential to reverse its proposed cuts to its postgraduate incentive grants for STEM, which will go a long way to supporting our ambitions around the semiconductor industry?

Vaughan Gething AC: On the final point, as the Member knows, any time a consequential is provided, we look at that centrally across the Government and think about our whole Government activities. Actually, I think the broader point comes back to a range of the financial questions he mentioned, and, indeed, our innovation strategy. It is even more important, because of our budget challenges, that we gain even more money from UK sources than we have done previously. That's a challenge not just within academia, but, actually, within the private sector as well, to make sure those partnerships are highly effective, which is why the Strength in Places bid is such a good example: 10 different organisations coming together to gain £42 million that would not have been here otherwise.
I understand why the Member points out that there are budget challenges for this Government. When he raised with me issues around funding a year ago, our budget position was actually better than it is today. The funding position and the reality of where we are have worsened, not improved. The autumn statement makes this budget round we're in even worse. And it goes back to the challenge the First Minister set out, not just to be able to honestly say 'If we had more money, we could create more and do more' and that would provide a real positive purpose for Wales, but if there are going to be additional priorities, we have to understand how that money will be moved around. Wales continues to have less say over less money, and I, for one, won't give the the Tories a free pass on that and try to make sure that all of the blame for those Tory choices ends up here.
When you consider apprenticeships, it's especially relevant. The loss of former EU funds and the deliberate destruction of all-Wales programmes by the Tories means that money is no longer available. That's why the budget challenge is so difficult in apprenticeships this year. And in my own department, we made a deliberate choice—I made the choice—to give relative protection to apprenticeships compared to everywhere else. That still means extraordinary challenges in the rest of the department. None of that, though, means that we are going to see less value in the money we spend. It's even more important, as I set out, that we gain greater value for that money.
As the First Minister said, we will still invest in apprenticeships over this next year. We will still invest alongside this sector further in R&D, further in job opportunities. And, actually, the sector itself is optimistic about growing the number of jobs it has in the next few years. What all of this highlights is that if our nearer and medium-term opportunities are to be realised, we need a different partnership with the UK Government. On that, there is real positivity for the future, not just me saying as a Labour politician 'I want to see colleagues in Westminster in Government', but it goes back to the pledge that has already been made. Funds and control over them to replace EU funds will come back to Wales where they always should have been—those funds and the powers that were stolen from us by the Tories. It's yet one more good reasonto vote Labour in the next UK general election, which cannot come soon enough.

John Griffiths AC: Minister, thank you very much for this statement today, highlighting the very positive nature of the semiconductor industry for Wales, and particularly for south-east Wales and, indeed, the constituents of my colleague Jayne Bryant and myself and other neighbouring authorities, because we know the industry really does provide very high-quality, well-rewarded jobs. And, as you say, there is such great potential for high growth and that research and development intensity that you mentioned, and the export-led nature of the industry is all very, very positive, I believe, for the future.
I note that the president and the chief executive of Vishay, in commenting on their purchase of Nexperia, highlighted the clustering in south Wales, Minister, and the company's intention to collaborate with the cluster and join with the key stakeholders in developing the semiconductor industry in the UK as a whole, but obviously for us particularly in south Wales. So, I just wonder if there's anything you might say about the importance of that and how Welsh Government will support that joint working and that key partnership.
And just also, as you mentioned the prospect of a UK Labour Government, we know that Gordon Brown's report is quite heavy on supporting the economic strengths that we currently have in areas like Wales, Scotland and the north of England, Minister, and obviously the semiconductor industry is a key part of that. So, are you already discussing with colleagues how we would be up and running with that UK-Welsh Government collaboration for the semiconductor industry in south-east Wales in the early days of that new UK Labour Government?

Vaughan Gething AC: Thank you. On Vishay and the cluster, I'm very pleased to say that not only have I directly met with representatives of the company, my officials have had further engagement and, indeed, with the wider cluster, and we've undertaken a number of introductions with different stakeholders and partners. And it was one of the things that attracted them here: that they already saw a connected and integrated cluster that was operating and that they wanted to positively be a part of. And their view isn't to simply replicate all of the businesses that are there now, they actually have ambitions to do different things that could add additional value, and they were especially keen on having a committed and skilled workforce to work with. And that longer term view on investment is something that we need in every part of this cluster to recognise not just opportunities in the next 12 to 15 months but actually to recognise that this is the growth sector for several years into the future. And, again, that underpins my choice to look at this cluster and this geography for the investment zone.
On future relationships with a different UK Government, I'm proud to say that I led the negotiations that got the commitment to return the powers and money to Wales if we have a future UK Labour Government. I hope that I'll have a more significant role in the future in those negotiations. We shall see what happens. I think you can be confident, though, that those conversations are already taking place, both with the potential occupants of No. 10 and No. 11, but also around a future industrial strategy, the place of semiconductors and this geographic cluster within that as a UK significant cluster as well. So, we're already having those conversations as well, and there is a recognition that this is significant not just for Wales but for the UK, and its global significance is recognised as well. I think, as I said in my statement, it is a genuine success story for Wales. We should be much prouder of something that we are doing a great deal with, and I believe there'll be more to celebrate in the future.

Peredur Owen Griffiths AS: I'll make my contribution brief, because I want to highlight the importance of the semiconductor industry in my region of South Wales East. It's important because of the Newport Wafer Fab. This site has, unfortunately, suffered a turbulent couple of years. After years of uncertainty, the workforce were beginning to look forward to a brighter future when it was acquired by Dutch-based technology company Nexperia, a subsidiary of Shanghai-listed Wingtech, in 2021. Following a review by the Tory Government, Nexperia were ordered to sell 86 per cent of its stake to, and I quote, mitigate the risk to national security. Redundancies sadly followed. Thankfully, towards the end of last year, American company Vishaycame in to acquire the site, in a deal worth a reported $177 million. Though, more investment in the site and a substantial increase in the workforce are a real prospect as a result. The only stumbling block, once again, is the Westminster Government, who appear to be dragging their heels when it comes to approving the takeover. Myself and Delyth Jewell have urged Westminster to stop prevaricating and approve the deal to give workers at the site the job security that they crave, and allow the promised investment to the site to begin.
Minister, can you expand on what discussions you've had with your counterparts in Westminster to ensure this deal gets over the line sooner rather than later, and do you also share my frustration that the fate of a key component of the Welsh economy is being determined hundreds of miles away by a myriad of changing Ministers in an institution that has not traditionally put the needs of our country first? Diolch.

Vaughan Gething AC: I think the first point around the previous ownership was I always clear that the national security considerations I understood would never be shared with Welsh Ministers. My frustration, as I've said several times in the Chamber, and indeed in direct conversation with UK Ministers, was about the time it took to review. I think the understanding of whether the Chinese-end ownership was or wasn't a risk—the starting point isn't a difficult one, but the time it took was deeply frustrating, and I know that the workforce felt that as well, as indeed the staff association made very, very clear on a number of occasions.We can look forward with some more confidence because Vishay have put in an offer that's been accepted, as well as the UK Government needing to make a choice, and the time frame is only just coming to an end for that choice. So, actually, on this issue, they're not currently dragging their heels. It's also about the pre-emption rights of the previous founder as well. So, there's a number of moving pieces that need to be resolved.
I have made very clear at the outset when Vishay announced what they wanted to do and subsequently that I want the UK Government to make a prompt decision to learn from what's happened in the past, and to make sure that the opportunities that exist really are undertaken. And it's no surprise that people are talking about Vishay. Natasha Asghar mentioned earlier the event that Jayne Bryant co-ordinated with the staff association. John Griffiths mentioned Vishay as well. There's a range of people employed currently at Newport Wafer Fab who are in a number of different constituencies, and indeed there's an opportunity for more over the medium term if, as I believe we will do, we can continue to support and grow the sector.

Y Dirprwy Lywydd / The Deputy Presiding Officer: And finally, Jayne Bryant.

Jayne Bryant AC: Diolch, deputy Llywydd. I'd like to thank the Minister for his very positive statement this afternoon. The south Wales semiconductor sector has brought opportunities and hundreds of millions of pounds of investment for well-paid, highly skilled, local jobs in Newport, in particular. And recent investment in the sector has been backed by solid support from the Welsh Government. In contrast, as we've heard, the Conservative Government in Westminster has created a prolonged period of uncertainty, in particular in my constituency at Newport Wafer Fab, and we did have that good news before Christmas about that investment from Vishay, which is very welcome.
But I'd also like to thank the Minister for his support and engagement throughout this process, and particularly over the last few months, and I know that the staff association, who he met here in the Senedd, would be glad that I put that on record as well, because safeguarding the future of this highly skilled workforce demonstrates the importance of investing in long-term sustainable growth and opportunities.
I'm really glad he mentioned KLA in Newport, which is supported by Welsh Government and expanding into my constituency. Again, a really positive step forward, and promoting diversity is also important for that sector's future growth. We must take action to ensure more people, particularly women and girls, see the sector as a route to a great career. This was something that I had a discussion on with the senior management at KLA when I met with them recently, and I know that you've done some work around that with them as well. Perhaps you can just say a little bit more about how we can increase that diversity within the sector, and also to make sure that young people in Newport and the surrounding areas know that this is a real opportunity for highly skilled, good-quality jobs in our area.

Vaughan Gething AC: Thank you for the comments and questions, particularly the kind of comments coming from the staff association. I've always been impressed when meeting the staff association that it's not just about the fact that they're organised, but they have a real understanding not just about their jobs, but about the sector itself and the different factors within it. I think one of the things we've definitely been able to offer from the Welsh Government is clarity and stability in the leadership we've provided here, and the way we've worked with other partners. And it’s worth reflecting we’re talking about a cluster in south-east Wales, much of which is in the Member’s constituency, but this is a sector that has a very wide reach right across Wales. If you think about the work that Jack Sargeant and Carolyn Thomas talk about with the Digital Signal Processing Centre of Excellenceat Bangor University, and indeed the photonics centre at Wrexham University—it's reliant on semiconductors, and there’s a direct relationship with a range of the people in the cluster. It’s also directly relevant to the advanced manufacturing sector.
So, actually, this is part of what will power the future, and that future should be created by men and women working together. At the moment this sector is still very male dominated, and it’s part of the conversation we’ve had. I think the interesting point is that KLA themselves recognise they need to do more. The headquarters based in California see diversity as a strength, not a risk, and when I visited the board in California they were clear about their ambition to expand, but also the recognition of the need to have that diversity in the workforce. They understand that, to get the staff they need to help power the future, only recruiting from half the population makes it much, much harder to do, and indeed this is a sector where the traditional view around it doesn’t actually match the jobs that exist now. It’s very clean work, it’s often highly skilled, it isn’t physically demanding in the way that people see different job roles for men and women traditionally. This is actually a sector where lots of women are starting to go in, but it’s about getting them and keeping them. It’s why, when I met with people in Germany, and indeed at the semiconductor UK organisation that was launched here in Cardiff just before Christmas, they were really stressing what they’re doing to look at the future. They have a programme looking at 30 under 30—30 future leaders who are under 30—and two of the winners of that UK-wide programme from Wales are young women who are setting out what they can do. These are more examples of women being successful and being recognised and seeing a good career in the sector, as part of what we need, as well as making clear this is a career for all of us, and a career in a sector that should mean a great deal to the whole of Wales in the future.

Y Dirprwy Lywydd / The Deputy Presiding Officer: I thank the Minister.

5. Statement by the Deputy Minister for Arts, Sport and Tourism: Statutory registration and licensing of visitor accommodation

Y Dirprwy Lywydd / The Deputy Presiding Officer: Item 5 is the statement by the Deputy Minister for Arts, Sport and Tourism: statutory registration and licensing of visitor accommodation. And I call on the Deputy Minister, Dawn Bowden.

Dawn Bowden AC: Diolch, Dirprwy Lywydd. The Welsh Government is committed to supporting a vibrant visitor economy all year round throughout Wales, whilst also helping secure thriving communities in a rapidly changing economy. We recognise how both outcomes depend on each other. This is a key focus in our tourism strategy, ‘Welcome to Wales: Priorities for the visitor economy 2020-2025’. However, the holiday market is changing rapidly. The way people book, stay and host trips across the world is barely recognisable compared with the start of this century. The growth of online booking platforms has brought many benefits, such as new routes to market and increased consumer choice. However, we are aware of concerns about the impact that some short-term lets can have on housing stock in communities and about inconsistent compliance with legal requirements.
The task of balancing the interests of a successful visitor economy with thriving local communities has led to reforms from Governments across the UK, Europe and beyond. One of the actions that we're taking, through our co-operation agreement with Plaid Cymru and our legislative programme, is to introduce a statutory registration and licensing scheme for all visitor accommodation. Last summer I published the results of our consultation for the scheme. Since then, we have continued to listen to our stakeholders, including businesses, communities and visitors. These conversations have helped us to develop our proposals.
I'm pleased to announce that it is our intention to develop a scheme where all visitor accommodation providers must meet certain requirements to operate. We want to show visitors to Wales the importance we place on their safety, and the standards we expect in the tourism sector—standards that many in the sector will already be complying with.
The purpose of this statement today is to provide an update—not the full details—of our journey so far to establish a scheme. In July we published the findings of the public consultation about how a licensing scheme could work. At the same time, we published a report of engagement sessions that we held with the sector, to discuss the technical aspects of the proposed scheme. In addition, in September we undertook a survey to gather consumer insight into how a statutory scheme might affect visitor perceptions of the accommodation offer in Wales. The 'Statutory licensing scheme for visitor accommodation providers: views of consumers and residents' report, published last month, highlights important issues that we cannot ignore and that we will seek to address through our proposals.

Dawn Bowden AC: The report shows that amongst residents across Wales, three in five—that's 59 per cent—believe that they have 'some' or 'a lot of' tourism in their area. Of those residents, the biggest perceived positive impact—69 per cent—was to the local economy. But that increase has also brought with it some negative impacts, such as a perceived increase in littering or pollution, difficulty in parking in the area or difficulty in local people being able to find an affordable house to buy or rent in their community. In a similar vein, 89 per cent of visitors to Wales that we surveyed considered it important that the accommodation they stay in is operating safely. The ability to raise concerns or complaints about standards was important for 76 per cent of visitors. It's therefore our intention to introduce legislation to the Senedd before the end of the year to establish both a registration scheme and a licensing scheme. And it is our intention to implement this in phases.
The first phase will be a statutory registration scheme for all accommodation providers. The register will give us important data and intelligence that is not currently available. The data gathered through registration will provide us with comprehensive information on who is operating in the sector, where they’re operating, and how they are operating. And this will help us to better understand the sector and inform future policy decisions at both a local and national level.
A register will also assist us in communicating and engaging directly with the sector to share best practice and to provide updates around various existing requirements. In addition, it will support the implementation of another co-operation agreement commitment: the introduction of a visitor levy. We want to make sure that we do not cause any duplication or additional administrative burden for the sector. And we will have this in mind when we're designing the service for both the visitor levy and the registration scheme. We will work to ensure that sufficient notice and support are given to accommodation providers on the process to register. And we propose a simple online registration process that will capture the basic details of visitor accommodation.
Once the registration scheme is fully established, our intention is then to develop a scheme that will require visitor accommodation to be licensed to operate. This will be based on safety requirements initially, before progressing to licensing based on quality standards at a later stage. In line with the co-operation agreement commitment, we intend to focus our licensing efforts initially on short-term lets that could otherwise be used as residential accommodation. This is in recognition of the current disparity in regulation between the private rented sector and short-term lets and their relationship with wider factors such as affordability and availability of housing, particularly for rent, for local people.
We believe that this three-phased approach will help improve safety and quality standards and, as a result, the appeal and reputation of visitor accommodation. Having a mechanism that will establish a baseline that all providers must meet in relation to both safety and quality, before being able to operate, will convey a positive message to our visitors and help improve consumer confidence. The intention is that a licence fee will apply, with a requirement to periodically renew that licence.
The Senedd will, of course, have the opportunity to scrutinise the legislation and the associated costs when the Bill encompassing both a registration and licensing scheme is introduced. The reforms proposed entail a new level of service delivery that includes additional functions that will require dedicated resource to set up new systems, in particular for the purposes of inspecting a large number of visitor accommodation premises across Wales. As a result, the implementation of each phase will need to take budgetary and other practical considerations into account. Further work is being undertaken to ensure that the proposed legislation provides clarity for the Senedd on the approach to implementation.
Businesses in the visitor economy have shown enormous resilience through unprecedented challenges in recent years and we recognise how its success is integral to the domestic and international impressions of Wales. Like many other nations, we also recognise that the success of the visitor economy relies upon cohesive communities where hosts, places and visitors can have greater confidence in a rapidly changing market. The input from the sector, visitors and communities has been invaluable to our work so far and we will continue this engagement as we develop the scheme. Diolch yn fawr.

Tom Giffard AS: Can I thank you, Deputy Minister, for your statement? You'll recall that when the economy Minister, who was responsible for tourism at the time, got the ball rolling on the introduction of a registration scheme, I said that I didn't think it was a bad idea in principle, in and of itself, and I hoped that such a scheme would do some of the things, in fairness, that you've mentioned today—some of that minimum baseline stuff, but also the promotion and the ability for Welsh Government to contact those businesses as well.
But, whilst this scheme could be introduced with the best of intentions, where we've seen it introduced elsewhere, we've seen how easily it can deliver the opposite outcomes to the objectives that you've set out today. So, when a similar scheme—admittedly, slightly different, I think, to what you're planning on introducing, but a similar scheme—was introduced in Scotland, for example, what we ended up seeing was a complicated and burdensome environment in which visitor accommodation providers needed to operate. In France, licensing schemes made it prohibitively expensive to operate as a small accommodation provider, and in Italy the number of businesses and visitors decreased. So, Deputy Minister, what lessons have you learnt from international examples where this registration scheme has been introduced and how will you avoid the pitfalls that other countries have experienced?
I do think that the Deputy Minister let the cat out of the bag, frankly, in the statement when she referred to the registration scheme as the first necessary step in the journey towards the introduction of a tourism tax. If I've said it once, I've said it a million times in this Chamber: one in seven people in Wales are employed in the tourism and hospitality sector, and a tax on tourism is a tax on jobs. We also know that somewhere like Venice—a tourism tax was introduced there to actively try and reduce the number of tourists visiting Venice, so I would hope that the Welsh Government is not introducing the tax in the hope of following suit and having fewer visitors here in Wales. Indeed, the Costa del Sol regional Government explored the idea of introducing a tourism tax, and they found that it would harm the tourism industry there and decided against introducing it. How I wish we had the same foresight here.
Indeed, you talked repeatedly in your statement about levelling the playing field in the tourism sector, but how will you level the playing field between those tourism providers in Wales who will be forced to make visiting more expensive by adding a tourism tax and those across our border and elsewhere who will not?
The tourism tax, of course, is just one of a slew, unfortunately, of anti-tourism measures introduced by this Welsh Labour Government. Instead of backing the tourism industry in Wales, as our Welsh Conservative plan does, the Welsh Labour Government wants to tax it instead. Many in the sector decried the introduction of the Welsh Government's cruel 182-day rule for self-catering holiday let properties, which is already damaging the sector by forcing them to pay higher taxes. But, speaking about that controversial 182-day tax for self-catering holiday lets, the consultation that preceded the introduction of that particular policy saw just 1 per cent of respondents to the consultation support a move to 182 days; in fact, many in the sector agreed with Welsh Conservative calls to set the level at 105 days, but the Welsh Government pressed on, ignored the consultation and did it anyway. You closed your statement by telling us that input from the sector had been invaluable to the work so far, but those involved in the sector, based on previous experience, have little faith that they will actually be listened to.
Speaking of consultations, looking at the summary of responses to the July consultation on this scheme, we saw that 65 per cent of participants disagreed with the proposal outright due to the pressing concern of visitor accommodation providers; 47 per cent disagreed with the statutory registration proposals; 61 per cent disagreed with the Minister's argument that the scheme would level the playing field; 63 per cent did not view the licence as being an effective platform for communication and 64 per cent disagreed with the notion of enhanced confidence in visitor accommodation providers. So, Deputy Minister, how will you respond to the points being made, and how will you restore the confidence that you've clearly lost from those in the sector who, on a number of fronts, don't have the confidence in the Welsh Government's intentions with the tourism sector?

Dawn Bowden AC: Okay. Well, can I thank Tom Giffard for those comments and for your initial positive comments in terms of the statement? I'll just deal with a couple of the points that you've raised first of all. You, understandably and quite rightly, raise the pitfalls in some of the schemes that we've seen elsewhere around the world, which is one of the reasons why we have been having those conversations with other Governments to see how they introduced their schemes and how they've worked, and to be able to learn from those in terms of making sure that our scheme doesn't run into those same sorts of difficulties. Of course, the Scottish scheme is very different to the scheme that we're proposing here—that was very much a licensing scheme only for short-term holiday lets; what we're proposing here is initially a registration scheme for all holiday accommodation so that we have a database, as I said in my statement, that will enable us to communicate with the sector. And part of that is—. You touched on the visitor levy, but part of that is really about having a database so that we know what visitor accommodation is used by people who come here. So, yes, these two pieces of legislation will speak to each other, but I'm not here presenting to you a statement about the delivery of the visitor levy registration, but just to say that there is some kind of interaction between the two in terms of that the data that we will gather from the registration scheme will, of course, help to inform the visitor levy.
You raise—I didn't expect you to do anything other, Tom, than to raise—the issue of the tourism levy and the 182 and so on, but my purpose today is not to deal with those issues; my purpose today is to set out a statement about our impending legislation that will be about delivering a registration and statutory licensing scheme for visitor accommodation. And we will continue to have that conversation with the sector; I do meet with them on a regular basis, as do my officials. I met with them just before Christmas and outlined what I was proposing to do around a statutory registration and licensing scheme. There is a general acceptance that there is a need to do something about this in terms of knowing where our accommodation is, building that database. And there is certainly a recognition from consumers that we need to have some kind of positivity within our tourism offer. That was clear from the survey that we did that that was something that was seen very positively by potential visitors to Wales. And this is about us growing the tourism sector, this is about us giving confidence to people that they can come to Wales knowing that they can visit accommodation in Wales that will meet certain standards.
As a part of that, of course, there is an aim within this legislation to help draw that parity between short-term holiday lets and the requirements on residential lets. And one of the things that we have seen is that, because of the very lax conditions around short-term holiday lets, there has been a propensity for landlords to move towards that sector using accommodation that could otherwise be used for living accommodation for people. And we know all about housing shortages. So, the part here about levelling the playing field is very clear; it is about saying that if you are going to rent accommodation to somebody, whether it is for a short-term let to enjoy a holiday or whether it is living accommodation, the standards that should be met should be equal. And that is, in essence, what we are seeking to do.

Mabon ap Gwynfor AS: Thank you to the Deputy Minister for her statement this afternoon. The package before us is a core part of the housing policy and tourism platform of Plaid Cymru, and we, and, indeed, the sector, have been calling for this regulation system for short-term lets and visitors for a number of years now. So, it'll come as no surprise to you that we welcome this announcement today.
Ensuring that people have the ability and choice to live in their neighbourhoods and the viability of Welsh-speaking communities are core principles. In order to deliver this, we must ensure access to affordable, quality housing. This package is another part of the jigsaw in order to tackle the housing crisis and overtourism and to make the sector more attractive to visitors, whilst also, as the Deputy Minister just noted, standardising the rules between the private sector and the holiday let sector.
I note that the proposal is a national one, and that's important. Far too often, the general belief is that this is a problem for secluded coastal and rural communities, created by having too many short-term holiday lets and an increase in house prices. But whilst those areas certainly do suffer, they are also problems in urban communities too. The impact of the holiday let sector on the availability of housing and the sustainability of the tourism sector is clear, and in a number of cases it is disastrous for local people, particularly those on low incomes. Research by the Bevan Foundation showed in 2022 that the number of homes used as short-term holiday lets had increased across Wales, placing significant pressure on the availability of housing for people to live in. The lack of regulation has led to a sector that has run riot and shows the worst kind of unregulated capitalism, with houses being treated as cash cows and our communities as quarries to be mined, rather than a foundation for building resilient and healthy communities.
But, according to Government research, the most prominent negative impact of this increase in number of holiday lets is an increase in pollution or littering, parking problems and local people's ability to find a house for rent or purchase in the community. In areas with a high density of Airbnb-type accommodation, the evidence shows that this has an impact on the availability of rental accommodation for low-income tenants too. These policies, therefore, will be another tool to help us overcome these problems.
Can I ask, therefore, how the Deputy Minister has worked and continues to work with the Minister for Climate Change, who has responsibility for housing and planning, in order to ensure that the way of dealing with this proposed legislation does tackle the issue of the availability of housing? The fact that we see these policies being introduced is a result of the co-operation agreement between ourselves in Plaid Cymru and the Government, and it shows political maturity as two parties collaborate in order to find resolution for a common problem. I therefore want to thank the designated Members and the special advisers for their work on this.
But I would like some clarity on the timetable, please, from the Deputy Minister. I wonder whether the Deputy Minister could tell us when exactly the Bill will be introduced. Likewise, the Deputy Minister stated that the licensing and registration scheme will be implemented in three phases. So, what's the timeline for the implementation of these phases?
One of the steps is to introduce a statutory registration scheme for all providers of accommodation, as we heard, in order to provide data and information to understand the sector better and to help steer policy decisions in the future at a local and national level, and to understand who is operating within the sector, where they are operating and how they're operating. But what plans does the Government have in order to gather data beyond the providers? For example, what consultation will there be with communities and local residents beyond the individual providers in order to get a more complete picture of the impact of overtourism or particular platforms and so on? Thank you very much.

Dawn Bowden AC: Diolch, Mabon, for those comments and for your support for what we are seeking to do in co-operation with your party and as part of our programme for government. We have a joint ambition, don't we, on making sure that we have a thriving tourist economy in Wales, but that we also have thriving communities that benefit from tourism and are not, actually, pushed out by tourism. That's at the root of not just this legislation, but the two other strands of legislation that we have introduced that help to support the second homes issue; the council tax and the 182 are all part of a wider plan to both benefit the tourism industry and to make sure that the tourism industry is contributing effectively to our local economies, to make sure that there remains a thriving community that people want to visit. People don't want to come and visit ghost towns, so we do need to have that balance, and I'm hoping that what people will see is that the introduction of this particular legislation will add to all of those things that you have talked about.
I am absolutely working with the Minister for Climate Change on some of these issues, particularly in relation to how the data that we gather will help to inform planning decisions for local authorities. So, at the moment, because we don't have any data on tourism accommodation and what accommodation is used for short-term lets and so on, it's very difficult for a local authority to make a decision when they get applications for change of use, for instance, to see whether that change of use from, say, residential accommodation to a short-term holiday let is actually in the best interests of that community. So, that is a very tangible aspect of this legislation, because it will provide a platform for other policy areas, so although it is not directly a piece of planning legislation, the data that we would be able to collect from that would help inform other policy areas as well.
In terms of the timetable, the intention is that the draft Bill will be introduced into the Senedd by the end of this year, and that we will have the scheme implemented by 2026. But what I have to say, Mabon—I need to be very frank about this—is that this is a mammoth exercise. We have no idea how much visitor accommodation we actually have, so this will be a huge exercise, and we have an aim to introduce all of this by 2026, but it will have to done in phases, because we have to get everybody registered first. Once we've got everybody registered, then we can start to move to the standard of accommodation that we want, and then the third aspect of that will be the quality accommodation, the quality standards that we look to do. And what we have done in discussion with the designated Member is to agree that the prioritisation for that second phase will be those short-term holiday lets.
And the consultation will continue, both with the sector, with the potential visitors to Wales, and more importantly, with the local communities. It needs to be that kind of joint approach to how we implement this legislation and how this benefits both the tourism sector and the communities of people that host tourism.
And I think your point about this being relevant in urban areas as well is absolutely spot on. I don't know whether you picked up that, very recently, the local authorities in New York have decided to ban Airbnbs in Manhattan, because there is no accommodation available for local people to live in Manhattan, and I saw a report just last night that to actually rent an apartment in Manhattan on average now costs you about $5,500 a month. So, that's the kind of thing that we want to avoid is pricing people out of the areas that they live in, and we hope very much that that's what this legislation will do.

Carolyn Thomas AS: I welcome this statement on the statutory registration of holiday accommodation to put all forms on an equal footing. I'm also concerned about losing long-term private rental accommodation homes—we call them—to short-term holiday lets. So, Airbnb say any solution should be nationally administered and consistent across local authorities to reduce complexity, and operators should be able to apply online and obtain an immediate decision on whether they can operate with fees reflective of scale of overnight activity, whether it's a room, or larger accommodation. But others believe that councils are best placed, and to keep it simple. So, I want to ask whether you believe local authorities have the resources, and what considerations you have given regarding delivery, and would you consider pilots.

Dawn Bowden AC: Thank you, Carolyn Thomas, for those comments, and you're absolutely right: central to this legislation is our concern about the loss of residential accommodation to short-term holiday lets in particular.
What I would say is, in terms of who will administer the scheme, we want to have a national scheme. We do want a single access to the scheme, for the visitor economy, for the visitor levy, for the short-term accommodation, for the registration; for all of that, we want that to be a single access and a single national scheme. So, there is still a considerable amount of work going on to develop that. What I said at the outset when introducing this statement today was that this is really just an update to give the intention of what we intend to do and there's still a huge amount of work going on about the options of how this will be delivered and who will actually deliver it. So, there has been no decision yet taken as to whether it should be local authorities, whether it should be a national body, whether we should have somebody different dealing with this; we've even talked to the Welsh Revenue Authority about some of these aspects as well. So, I will keep the Senedd informed and updated as we go along, but I think the key intentions here have been set out quite clearly, that that is what we are intending to do and the way in which this will be delivered will be delivered once we've had those further consultations with the sector and the communities that would be affected. Diolch.

Sam Rowlands AS: Thank you, Deputy Minister, for your statement today. Certainly, in my role as the chair of the cross-party group on tourism, registration and licensing is an issue that has come up a number of times. Just two quick points, really. The first is the move towards statutory registration and not voluntary registration. I'm interested to understand your logic behind that, particularly as the economy Minister has previously stated that he believes that most visitor accommodation providers want to operate within the law, and he's also added that he wants to ensure a high level of voluntary compliance. So, I'm interested why you're moving now to a statutory registration rather than a voluntary one.
Secondly, I do have some concerns with the idea, as you've outlined at stage 3 of the process, that Welsh Government are going seek to be the arbiter of whether a business can operate or not, not just based on a safety position, but based on your judgment of quality, and I wonder if you could give us a flavour today of what perhaps that quality might be in your judgment. Is it the softness of the mattress? Is it the heft of the cutlery perhaps or the depth of the pile of the carpets? I mean, what is it that you judge to be a quality accommodation? I guess the point is that, for visitors, the quality of accommodation can be subjective and varies from person to person depending on the experience that they want, so I have some significant concerns there. And also, linked to that, you don't choose to do that for other types of businesses: you don't go into barber shops and check the quality of the haircuts that are taking place or the quality of clothes being sold in a clothing shop or the quality of nails being filed in a nail bar. I wonder why it is that the tourism industry are being targeted when it comes to this idea of quality and what you see as a standard of quality. Thank you very much.

Dawn Bowden AC: Thank you, Sam Rowlands, for those questions. Well, the statutory licensing, I mean, we're moving to registration to start with and then to a statutory licensing scheme for the reasons that I set out in the statement. We do want to have compliance and we do want to have a standard, and so the only way that we can ensure that we do that is to license it, because the licensing actually brings with it a legal obligation to meet certain standards. So, you know, there are so many different types of accommodation with different standards that they have to apply, and each type of accommodation will have to meet the relevant standard for their type of accommodation, and there will be a compliance requirement on them to do that, and failure to do that will bring with it some penalties. So, there is a good reason for doing that to ensure consumer confidence in any visitor accommodation that they attend.
I do take issue with you, Sam, because I do think people staying in accommodation is slightly different to somebody going for a haircut. If you go and have a haircut and you don't like the haircut, you won't go there again, but in terms of accommodation, there are issues about safety in accommodation, and that is part of what we are seeking to introduce: safety standards in every type of holiday accommodation or short-term let that is made available, and that will be part of the statutory registration.
And in terms of quality, well, yes, there clearly needs to be some conversation with the sector, with visitors, about what they look for in accommodation. We use it to a certain extent already through Visit Wales; there is a kind of star rating that Visit Wales uses, and it will be pretty much building on that system that already exists. So, the depth of the carpet might get you one star or three stars, it depends what you're looking for, but there will be a certain standard, basic provision that every type of accommodation will be expected to deliver, and anything that goes beyond those basic standards, then clearly the kind of rating would increase accordingly. So, it's just basically building on what we already have. So, I don't see it as tourism being targeted, Sam. I see it very much as tourism being put on a footing that gives visitors more confidence to use the sector and therefore encourage more people to come to Wales as a country that they know they can come and visit with confidence.

The Llywydd took the Chair.

Y Llywydd / The Llywydd: And lastly, Darren Millar.

Darren Millar AC: Diolch, Llywydd. Minister, I was initially not concerned too much about your statement, but I'm afraid now I am, and I'm rather confused by it as well. I think everybody in this Chamber would absolutely agree that we need to make sure that the accommodation that people stay in is safe. No-one's got an argument with that at all. No-one's got an argument either about having some sort of scheme that ensures that that accommodation is safe. But I think what you are failing to grasp as a Government is that there are different types of accommodation that people like to enjoy. So, the standard and quality of accommodation in a tent is going to be very different to the standard and quality of a four-star hotel on the Llandudno seafront, for example. A holiday caravan is a completely different experience again, and may still be safe, but obviously is not going to meet the same quality standards that you seem to be implying that all accommodation has to meet. I wonder whether you can give us assurances that the scheme that you're proposing is not going to have an adverse impact on the holiday caravan industry in particular, which is very important in my own constituency, and that these licensing arrangements that you're talking about are not going to apply to individuals who might own a holiday caravan.
Secondly, another thing that I was very disappointed about was that you don't mention the fact that there could be groups of accommodation that ought to be exempted from the arrangements, not just the holiday caravans. One of the things that I have corresponded with you about twice now is the very simple accommodation, sometimes, that people on pilgrimage might have access to. That accommodation should be excluded, I believe, from the arrangements. Of course it should be safe, but it shouldn't have to meet the same sort of quality standards that other accommodation might need to meet. There were references to it in the feedback that was given as part of the consultation exercise, but your consultation summary didn't refer to pilgrim accommodation at all, which baffled me to some extent. So, what assurances can you give to those simple places of accommodation, such as churches on pilgrim routes, that they also will be able to be exempt from some of what may be, from the sounds of it, onerous requirements in some respects?

Dawn Bowden AC: I thank Darren Millar for those comments. I think we need to be very clear: all visitor accommodation comes within scope in terms of what we look at. Obviously, personal accommodation—personal caravans that people have—wouldn't be covered. That's a piece of property that belongs to an individual that they use. If those people then want to rent those caravans out to somebody else, then there are certain standards that they have to meet to enable them to do that, so that anybody they rent that out to can be assured that the accommodation is safe.
All of this will become apparent as we go through the consultation. I said at the outset of the statement that this is not a full and final statement of where we are and what we're doing. We have a whole process of consultations still to go through. The detail of the legislation is still being worked through, but the basic premise is that visitor accommodation must meet certain safety standards. Every accommodation must register. Certain basic safety standards need to be applied for any accommodation that is rented out for short-term lets. There will then be a second phase, which looks at the further standards that we would require around the parity between short-term lets and residential accommodation. And then the third aspect of it is the quality standard. We will be looking at that in three phases. Each of those phases will be subject to consultation. So, we're introducing framework legislation that will allow us to develop the legislation as we go through.
On the exempt accommodation, you have written to me, Darren, about pilgrimage churches and chapels, and what I would say is we haven't made a decision on that yet, but whether you stay in a church or a hotel, then with accommodation, whether it operates for one day a year or 365 days of the year, there are safety standards that we would expect. But whether there will be particular accommodation that is exempted from this is still subject to the ongoing discussion that we'll be having with the sector.

Y Llywydd / The Llywydd: Thank you, Deputy Minister.

6. Debate on a Statement: The Draft Budget 2024-25

Y Llywydd / The Llywydd: The next item will be the debate on the draft budget 2024-25, and I call on the Minister for finance to make the statement on the budget. Rebecca Evans.

Rebecca Evans AC: Thank you. I’m pleased to make a statement on the Welsh Government’s draft budget for 2024-25, which was laid on 19 December. Let me be clear: Wales is facing the toughest financial situation since the start of devolution. In making this draft budget, my Cabinet colleagues have all faced a series of stark and painful choices. Devolution means decisions about Wales are made in Wales, including those decisions on spending. But even after tax devolution, the majority of our funding still comes in the form of the block grant from the UK Government, meaning that the amount of money available to us is a direct result of spending decisions made by UK Government Ministers.
Over the last 13 years, successive UK Governments have given us more than a decade of austerity, a botched Brexit, and a disastrous mini budget that almost crashed the economy. Despite our best efforts to shield public services, businesses and the Welsh population from the worst impacts of these policies, each has, individually and collectively, had a significant and lasting impact on Wales. We have also experienced the COVID-19 pandemic, wars in Ukraine and the middle east, record levels of inflation, and a cost-of-living crisis, all while we continue to respond to the nature and climate emergencies.
The Chancellor claims that action taken by the UK Government has helped the economy to turn a corner, but the reality is that forecasts from the Organisation for Economic Co-operation and Development and the International Monetary Fund show the UK is on course to be one of the worst-performing advanced economies this year and next, both in terms of high inflation and weak growth. The Office for Budget Responsibility’s new forecast paints a picture of poor UK economic prospects with only lacklustre growth expected for almost two years, inflation reducing more slowly than previously expected, and unemployment increasing. Living standards will be 3.5 per cent lower next year than before the pandemic.
The OBR's forecast shows the economy growing by just 0.2 per cent on average each quarter through to the end of next year, compared with an average quarterly growth rate of 0.5 per cent achieved between 1997 and 2010. And the latest gross domestic product data from the Office for National Statistics shows no growth in quarter 2, followed by negative growth in quarter 3. While the Prime Minister’s target to halve inflation has been met, this is almost entirely down to a combination of global factors driving down energy and food prices and the Bank of England’s programme of increasing interest rates—we've had 14 successive increases to the base rate.
At the autumn statement, rather than restore funding to fragile public services, the Chancellor signalled a fresh round of austerity. He chose to use his fiscal headroom to make relatively modest tax cuts and focus on short-term projects in marginal constituencies. The Institute for Fiscal Studies notes that the public finances have not meaningfully improved, the growth outlook has weakened, and inflation is expected to stay higher for longer. Following the autumn statement, the Welsh Government’s resource settlement will reduce by 0.1 per cent in 2024-25 in real terms, and our capital budget is down by 6 per cent in real terms. Overall, that’s a 1 per cent year-on-year real-terms reduction to our settlement.
Our settlement for 2024-25 is now worth up to £1.3 billion less in real terms than expected at the time of the 2021 spending review. The choices made by the Chancellor in his autumn statement have not made our choices any easier. They have short-term consequences on the decisions that we can take in Wales in this budget round, and they will have longer term consequences across the UK as public services once again face deep and damaging cuts because they have been deprived of real investment. Once again, our funding settlement is not sufficient to respond to the extraordinary pressures that Wales faces.
In making this draft budget, we have had to take incredibly difficult decisions, and they are the most stark and painful since devolution. We have worked over many months to radically reshape our budget so that we canfocus funding on the services that matter most to people.

Rebecca Evans AC: We have focused funding to invest more in the NHS and to protect the core local government settlement, which in turn funds schools, social services, and the other vital everyday services that we rely on. We have reshaped our budgets in line with a set of guiding principles: to protect core, front-line public services as far as possible; to deliver the greatest benefit to households that are hardest hit; to prioritise jobs, wherever possible; and to work in partnership with other public sector bodies to face this financial storm together.
The draft budget provides an extra £450 million to support the NHS in 2024-25. This is on top of the additional £425 million that we made available in October for 2023-24. This means that we are increasing funding for the NHS in Wales by more than 4 per cent in 2024-25 compared to less than 1 per cent in England.
We're protecting the core local government settlement, which, with council tax, funds schools, social services and social care, refuse and recycling collections and local services. We are providing the 3.1 per cent increase that we promised last year. We are also providing an extra £1.3 million through the revenue support grant to ensure that no authority has an increase in settlement of below 2 per cent. But even with this additional funding, 2024-25 will still be a difficult year for health boards and councils.
Funding that goes directly to schools has been prioritised. Our successful COVID recovery programme, Recruit, Recover and Raise Standards, was due to be tapered as the post-pandemic effects lessen. However, we know that the impacts of the pandemic are continuing to be detrimental to our learners across Wales, so we are protecting this funding in order to continue to support them. We're also protecting the pupil development grant funding that funds schools to support learners from low-income households.
We will maintain targeted and emergency support for people affected by the ongoing cost-of-living crisis, and we will continue to spend more than £0.5 billion to help households and businesses pay their council and non-domestic rates bills. We have taken the decision to cap the increase to the non-domestic rates multiplier for 2024-25 to 5 per cent at a recurring cost annually to the Welsh budget of £18 million. This is the maximum level of support affordable using all of the consequential funding that came to Wales from the UK Government’s decision relating to the multiplier in England.
Almost half of ratepayers, including thousands of small businesses across Wales, will not be affected by an increase in the multiplier, as our generous system of full reliefs means that they already pay no rates at all. We will also be investing an additional £78 million to provide a fifth successive year of support for retail, leisure and hospitality businesses with their NDR bills. Eligible ratepayers will receive 40 per cent NDR relief for the duration of 2024-25. This builds on the almost £1 billion of support provided through retail, leisure and hospitality relief schemes since 2020-21. We will also be introducing a £20 million futureproofing fund in our final budget. This fund will be available to retail and hospitality businesses to invest in measures to futureproof their business, such as investment in renewable energy and digital enhancement to improve their sustainability.
We're acting to protect those areas that matter most. This includes protecting funding for the programmes that are important to the agriculture sector, maintaining the basic payment scheme at the same level of £238 million for 2024. But we have needed to take further difficult decisions, including to refocus some spending away from non-devolved areas, which the UK Government should be funding. These are areas where we have previously been able to step in to fill the gap. We are reprioritising £7.5 million from the budget for PCSOs. While we will still invest £15.5 million in Welsh Government-funded police community support officers, our policing partners will need to reshape their workforce. We will work closely with our partners to minimise the negative impacts as far as possible. We are reprioritising £15.5 million from the Ukraine programme due to the reduced number of new arrivals alongside the success of our programme to move people on from their initial accommodation.
The unprecedented pressures on both our budget and the budgets of public services across Wales mean that we will need to look at other potential sources of funding. We will therefore carefully consider whether we need to increase existing charges for some services, such as NHS dental care, university tuition fees and domiciliary care.
Llywydd, I look forward to this afternoon’s debate and the ongoing debate that will follow, but before I conclude my opening remarks I would like to say again that I'm very grateful to all of my Cabinet colleagues for their ongoing commitment and hard work during this process. I also want to thank Siân Gwenllian for our good working relationship and her ongoing engagement in relation to the co-operation agreement, which is a small proportion, around 1 per cent of our overall budget. This is a difficult budget in extraordinary times, but, ultimately, it is a budget that targets investment towards the public services that people in Wales tell us that they value the most.

Peter Fox AS: Thank you for the statement, Minister. I think all would agree here that proper scrutiny is so important. Democracy is made stronger by a Government that accepts and invites scrutiny and accountability, especially at a time when the Welsh Government is failing on so many levels. Once again, the Welsh Government has chosen to release their draft budget during recess and not directly to Parliament, as they do in Scotland or in England. This approach stifles the opportunity for proper challenge, forcing a rushed approach to scrutiny, leaving committees little time and us in this Chamber probably an hour or two, tops, for debate. The presentation of timely budgets is a fundamental right that parliamentarians should be able to expect. I honestly can't understand why the Welsh Government couldn't have presented its budget proposals earlier, with scenarios that could have reflected changes that may have been influenced by the autumn statement, even if the final draft budget itself could not be completed until 19 December. We saw no change in thinking after the autumn statement.
So, moving on, Llywydd. The people of Wales deserve to have reliable and high-quality public services, especially in this day and age. It's 2024, for heaven's sake. These things we took for granted for decades, things like healthcare being delivered in a timely way at the point of need or being able to get a care package for our loved ones or the best education for our children. These and so many more fundamental expectations have been eroded or damaged as a result of 25 years of this Government. The Government's budget narrative states that this budget aims to, I quote,
'protect the services which matter most to people'.
I would suggest that this is very unlikely with this budget, despite the increased funding to our NHS.
As we all know, the Welsh Government received that £1.20 for every £1 spent, per person, on health and education in England, but we know it hasn't been spending all it should've done. Indeed, only as much as about £1.05, prior to the pandemic. The extra money Wales receives was negotiated through the fiscal framework, agreed by Welsh Government, and further additional need here is now recognised through a needs-based adjustment within the Barnett system—a needs-based element that the First Minister recently denied that it existed but the budget narrative itself confirms that, in paragraph 1.08.
Now, we welcome more money going to health. It's about time. As I've said here before, if the Government had been investing in the health service as it should've done over the last 10 years, at least our Welsh NHS would've been resilient and strong, and we wouldn't have seen the in-year knee-jerk budget adjustments and the proposals having to come forward, as now. Just to put into context, another 5p spent in £1 in health would've amounted to around £500 million a year. Sadly, this money has been spent elsewhere for many, many years.
As it stands—[Interruption.] No, I won't take any interventions today. As it stands, every health board in Wales is under some form of enhanced monitoring or special measures for finance, and is expected to make savings also. Yes, pressures are common across the health services in the United Kingdom, but not at the levels they are here. The truth is, the Welsh Government has been preoccupied on so many other things for too long. It's a fact our NHS is struggling, due to years of underfunding. Our hard working—[Interruption.] Sorry?

Huw Irranca-Davies AC: Would you give way?

Peter Fox AS: I'm not going to give way, no, because I'm conscious of time.
Our hard-working staff are doing their best under ever-increasing pressures, but this cannot go on. A third of Welsh NHS staff absences are a direct result of stress due to an ever-increasing workload, and we have to reverse this.
I was astounded also to see that there had been an 8.8 per cent cash cut to the mental health budget. We have heard so many times in this Chamber from Ministers about the importance of mental health, so this simply doesn't make sense. The Government talk about making the hard choices, but let's be clear—the real difficult choices are being made and are expected to be made by the county councils, who are being short-changed by the local government settlement, and, for some, not helped by the outdated and unfair funding formula. Let's be clear—a 3.1 per cent increase for local government is poor. This is a huge real-terms cut that you, the Government, are levelling on councils. It's not the UK Government doing it, it's not anyone else—it's down to Welsh Government and their choices, choices that you have decided to make.
And we all know of the huge problems in social care, a crucial service delivered by our councils. We know it's one of the key issues in preventing our health service from getting back on its feet, but where is the recognition of that fact in the local government settlement? Ministers will never sort out the NHS without focusing hard on social care. You cannot keep passing this huge pressure to councils to deal with.
Council tax in Wales has already gone up by over 200 per cent since 1999, compensating for the fact that successive Labour Governments have not adequately funded many of our local authorities. Sadly, it is the hard-working people of Wales who are having to pay the price. I've already heard of a council that is considering a council tax increase this year of 8.5 per cent. Labour and Plaid, a key partner of the Government, are trying to have it both ways, saying all of the right things yet failing to back it up with the resources required.
And this philosophy extends to many in the business community. Once again, businesses in Wales are being hit with the highest business rates in Great Britain. Whilst the UK Conservative Government continue to provide business rate relief at 75 per cent for businesses in the hospitality, leisure and retail sectors, Labour Ministers have chosen to provide only half of the level of support, at 40 per cent. This is on top of our hospitality sector being faced with the impact of tourism tax. It's no wonder our Welsh economy and its businesses are struggling as they are.
Many businesses in Wales are facing a skills crisis, having plenty of jobs open but being unable to find the skills they need. While this is a problem across the United Kingdom, it's especially prevalent here in Wales. Labour's economy Minister, aspiring First Minister, has already admitted that the Labour Government will miss their target and fail to deliver on their pledges to create 125,000 apprenticeships this Senedd term. The cuts in the sector are, in the words of ColegauCymru, 'catastrophic', and will see 10,000 fewer apprentices able to start next year.
Welsh Labour have got to wake up to the fact you have to have a strong economy to create growth and wealth, which, in turn, creates resilience and opportunity, and skills are fundamental for this to happen. And without that focus on skills, the Government will continue to destroy the chance of Wales ever reaching its potential.
Looking at education, instead of delivering long-term funding to secure the teaching profession, you have cut teacher development by over 50 per cent, yet another blow to the education sector. Instead of providing every single child in Wales with an equal opportunity in education, you have chosen to cut the budget for those with additional learning needs by 86 per cent.
On this trajectory, you have afforded the people of Wales a very bleak future indeed, one with businesses but no workers, one with schools but with too few teachers, and one with hospitals but too few doctors and nurses, and one with fewer police community support officers to help keep us safe.
Llywydd, what is very clear from this budget is that, while times are financially difficult, there always seems to be money for the Government to fund its politics, its deal with Plaid or its pet projects. Just look at the incredibly expensive and economically damaging 20 mph policy in Wales, a prime example of putting politics over practicality, or the ill-thought-out universal basic income pilot that we understand won’t be taken forward, but will still be given an extra £3 million in this year’s budget. That’s unbelievable. And I could go on.
The fact is the Welsh Labour Government have not been prioritising the right things for years, and it will take a long time to unpick the problems they’ve caused. What does remain consistent is Labour’s obsession with avoiding taking responsibility for its running of Wales. It’s always somebody else’s or something’s fault. What is evident is that if Welsh Labour is the blueprint for the United Kingdom, as Keir Starmer once said—although he’s subsequently gone very quiet on the subject—well, then heaven help us. For years we needed a Welsh Government willing to address the people’s priorities, ensuring they tackle our appalling high waiting lists, our overburdened businesses and crumbling education system. The facts show, Llywydd, we haven’t had this, and the people of Wales are paying the price.

Rhun ap Iorwerth AC: I welcome this debate on the draft budget. In doing that, I have to make the point that I do regret that there wasn't an opportunity for initial scrutiny here before Christmas. A pattern has emerged over recent years of allowing timely scrutiny on Government spending plans to happen through ministerial television interviews rather than on the floor of the Chamber. In those early days after the publication of the draft budget there is very real interest in the budget, and I do think we need to have that initial scrutiny. Scotland managed to do it, and when there is over £20 billion at stake, I think we have to do better than this. I do hope for a different approach for the financial year of 2025-26 and beyond.

Rhun ap Iorwerth AC: I, of course, have a great degree of sympathy with Ministers with this budget as they grapple with a budget squeezed as a consequence of incompetent Tory Chancellors—I lose count how many—and a UK Conservative Government that puts short-term populism ahead of economic fairness for Wales. It is undoubtedly the case that cuts totalling £422 million in day-to-day spending across all portfolios apart from health and Transport for Wales can in part be attributed to an outdated funding formula that takes no account by 2024 of Wales’s needs. Also, new post-Brexit arrangements run directly by the UK Government have undermined the Welsh Government’s ability to strategically plan spending for the benefit of Wales and its communities, leaving us £1 billion worse off in unreplaced funding streams over three years. And then consequentials from HS2, and add Northern Powerhouse Rail to that too—money that is rightfully ours, and if invested properly could have a transformative effect on our infrastructure, continues to be denied to us despite cross-party agreement here in the Senedd, and despite the blatant unfairness of denying us that funding, which is given to Scotland and Northern Ireland and which has an ability to make such a difference.
Yes, it is a poor hand that the Labour Government in Wales has been dealt. But we have to scrutinise the way it’s playing that hand too. And on the fairness agenda, regrettably the Welsh Government’s narrative is full of inconsistencies. Last year I was pleased to hear a suggestion that Welsh Government was ready to launch a legal challenge against the UK Government on HS2 consequentials, and yet Ministers have failed to persuade Keir Starmer, a Labour colleague of theirs and likely Prime Minister if the polls remain as they are, of the current injustice. Plans announced by the education Minister to reverse the cuts to his budget if he becomes leader are largely predicated on a Labour UK Government being in No. 10 Downing Street, and it would have to be a very different Labour Government to the one Rachel Reeves is suggesting we would have,given her determination, it seems, to stick to Conservative spending plans and to stick to Jeremy Hunt's orthodoxy.
And let's be straight: if Labour in Wales fail to secure a meaningful and lasting commitment to fair funding from the Labour Party in London—a Labour Government, if that's what we have at Westminster—it cannot with any credibility, can it, claim to be shedding anything other than crocodile tears over the current settlement.
The black hole in this budget, more than any budget in the age of devolution, has exposed clearly the damaging premium we pay for the supposed insurance policy offered by the union. And whilst we know that the Conservatives aren't interested in making sure that insurance policy pays out for Wales we also can see, sadly, how little Keir Starmer seems to care about underwriting a fair deal for Wales as that general election approaches. And we will continue to put pressure on the current and, potentially, incoming Government to right that wrong.

Huw Irranca-Davies AC: Will you give way on that very point?

Rhun ap Iorwerth AC: Yes, of course.

Huw Irranca-Davies AC: You make an interesting point, which you consistently make. But one thing I would ask you to reflect on, and for your thoughts on, is the track record of previous Labour Governments. Because the same applied when Gordon Brown came in in 1997 as the Treasury—. He said no guarantees; we have to look at the books first of all. The criticism that could be made, actually, of that Labour Government is that they did that actual transfer to Wales and transfer to the poorest in society by stealth, but they did it. So, there is a track record to look at.

Rhun ap Iorwerth AC: And it's a point. There is an extent to which an incoming Government hasn't got the books at its disposal. The same is true here; we don't have the books that Welsh Government has. But when it comes to an unfairness as fundamental as HS2, a Labour Government in waiting should be making it very clear that it has to find that money because it is such a blatant unfairness.
Now, the lack of a political fight, if you like, is a backdrop to a budget that exposes a failure of joined-up thinking that is, sadly, a hallmark of successive Labour Governments in Wales. As the Wales Governance Centre reports, its spending outside the health service this year is about 10 per cent lower, in real terms, than it was in 2010. Yes, in part, due to austerity but also because of Labour's mismanagement of key devolved areas, resulting in a budget riddled with contradictions. In Wales this Government spends more and more on managing ill health as opposed to addressing its root causes. It still fails to map out how it wishes to move, even, to a time where we have a more balanced health and care landscape, where the preventative is truly prioritised. Even if that is difficult today, tell us how you're going to get to that point.
It curtails the life chances of our young people by cutting the apprenticeship budget that Luke Fletcher has been speaking about so eloquently, despite young people being a priority area in the new economic strategy put forward by the budding First Minister, Vaughan Gething. It cuts the education budget, despite the considerable challenges exposed by the recent PISA results.
It'll impoverish our cultural institutions at a time of growing national confidence. As Andrew Green, the former librarian at the National Library of Wales wrote last week:
'At the centre of government there’s a fatal lack of understanding and lack of vision about the role of culture and the arts in...how we’re seen by people outside Wales.'
And as he points out, the approach here is very different to that of the Scottish Government, who are increasing spending on arts and culture despite also facing budgetary pressures. These things are important.
And it relegates rural affairs to, too often, an afterthought at the Cabinet table, I fear, to the back of the funding queue, although guarantees to maintain the basic payment scheme at current levels is a welcome commitment, and one that Plaid Cymru pressed so hard to secure.
And, indeed, the scale of ambition demonstrated by the concessions Plaid Cymru has secured in this budget, though it's from a tiny proportion of the overall budget through the co-operation agreement, that kind of ambition shouldn't be the exception but rather the rule. And as I say, the elements of the co-operation agreement amount to a very small proportion of the entire budget, but for the sake of our children in receipt of free school meals, for the sake of those benefiting from mental health hubs, for the sake of those better able to afford a home in their communities, we owe it to them to continue delivering what I firmly believe are priorities in communities right across Wales.
Outside those areas where we have common ground and where we have formed agreement, we find an all-too-predictable tale: years going by and consecutive budgets being passed with no appreciative change of direction. Nowhere, perhaps, is this more evident, as I suggested earlier, than in health. I wholeheartedly agree with Helen Whyley, director of the Royal College of Nursing in Wales, who said last week:
'It seems to me like we keep having the conversation. We keep being told there's no more money, and yet we're not thinking creatively about how we use the money that's in the system. The amount of money'
she said
'we spend on agency staff is quite frankly shocking.'
And it is poor workforce planning by Welsh Government that ties hundreds of millions of pounds into agency working. Unless that is sorted, we will never be able to build, as I say, that balanced health and care system.
What we have before us reflects an all-too-familiar pattern: a UK Government out of step with Wales's needs in terms of fairness of funding and also in terms of powers. I'm making the case today to give us the powers to be able to use our taxation, the scope of taxation, in a nuanced way, which we currently can't. Scotland has those powers; we should be able to. But we have here a reflection of that UK Government out of step with Wales's needs and the Welsh Government falling short of demonstrating the coherent thinking required to transform our economy and public services by identifying the link between social and economic justice. And most worrying of all, there's little sign that a change of Government in Westminster will bring about fair funding for Wales, which begs the question: who will the Welsh Government blame then? That's why it is so important that we have that Plaid Cymru voice pushing and pushing, making the case for fairness for Wales, and I implore Welsh Government to think afresh, to be bolder and to reflect on whether the spending plans of today really meet the challenges of tomorrow.

Mike Hedges AC: There is no surprise that countries such as those in Scandinavia that have the highest taxes have the best public services. Taxation exists to pay for public services. Taxation is our entry price to a civilised society. Too many people believe that we can have the same quality of public services as Scandinavia but a taxation rate that is more like that of the USA.
When you look at the cost of private education and private healthcare, it puts into perspective the value for money we get from our taxation system. It is not by random chance or serendipity that those countries with the highest tax levels have the best public services and those with the lowest tax levels the poorest. It's because taxation is necessary to raise the money to pay for the public services we all need and use. Whilst the Conservatives are obsessed with cutting taxes to benefit mainly the rich, I am concerned about a reduction in the quality of public services due to the reduction in public expenditure in devolved areas.
In 2024-25, as the Minister said earlier, our budget is worth £1.3 billion less in real terms. That's over a 5 per cent real-terms decrease in every area of expenditure. The budget invests more in the national health service, which is also a Welsh Government, Senedd and public priority. I'm concerned that the portion of the health budget spent on primary care continues to reduce, and I'm asking, as part of the budget settlement, that the current percentage spent on primary care is protected, but also that the standard of all providers is raised to that of the best. There is a primary care provider in my constituency where a patient that rings up and says that they need an emergency appointment is told, 'Well, you need to go to A&E then.' That's what A&E needs: more people being sent there. Primary care performance needs monitoring by health boards. I keep being told that they are private providers, which is true, but the health board needs to ensure that they meet the patients' requirements. We, via the health board, are paying them. Also, when people cannot get appointments with GP services they go to A&E or wait until their health deteriorates and then they go to A&E as an emergency. Patients cannot get an appointment to see their GP. They're either too late or cannot get past the receptionist. The only place that they can go and are guaranteed to see a doctor is A&E—A&E has now become the default walk-in consultation. Is it any surprise that we have long queues in A&E? It should not be a surprise that A&E is no longer accident and emergency, but the place you have to go if something is the matter. As more go to A&E, A&E becomes overwhelmed and then you have ambulances queuing outside.
When we give more money to health boards—and I don't think anybody is going to argue against that this year—health boards need targets for activities, such as hip replacements and cataract operations et cetera. We need to know what we're getting for giving them extra money. We just give them extra money and hope it all works out well. We need targets. I know that not everybody is a great fan of targets, but we need targets. We need to say, 'We're giving you this; this is what we expect to achieve with this money.'
Improving health needs to become a priority. We know reducing smoking, increasing exercise and reducing obesity rather than waiting for people to become ill and then treating them will, obviously, improve health. We also know that housing is incredibly important to ill health. People who are poorly nourished, living in cold and damp conditions, are much more likely to be ill, and, when they're elderly, they have a serious problem that they can become seriously ill and they end up in hospital and they can't be discharged from hospital, because the house they're going to go back to is not suitable for them. Therefore, we end up with what some people call bed blocking, other people call the fact that we have got people in hospital who cannot be discharged because of the problems they've got. If social care is inadequate, people cannot be discharged from hospital, or, due to inadequate social care, end up in hospital.
Where can savings be made? Take theBrexit dividend. Basic farm payments no longer have to be made; we're no longer part of the European Union. I suggest the Government produce a programme over three years to remove basic farm payments. Historically, Wales paid more for TB-infected cattle than England. If that is still the case, reduce expenditure per animal to the same as England.
Stop funding enterprise zones. In the last Senedd, the economy committee, under Russell George, concluded that, on the whole, the enterprise zone concept had not proved itself, despite £220 million of expenditure. Do not fund things such as giving £4 million to a New Zealand-based company to build a tourist attraction. We should not be using public money to build tourist attractions. Do not buy land for festival use.
Provide training grants for companies relocating to Wales, but do not give them grants. We have developed a new form of capitalism: subsidy capitalism, where profits are padded by public money. Support education. We want firms to stand up and come here because of the quality of the workforce. But it really is important that what we do benefits our economy and benefits the health of our people.

Janet Finch-Saunders AC: I'll refer Members to a declaration of interest in terms of land and property ownership.
So, here we are, once again. This is a draft budget in which Welsh Labour and Plaid Cymru will cause direct harm to the fabric of our nation, just like the blanket 20 mph restrictions, and, I tell you what, this budget will be rejected by the voters. I personally wish there was an election next week here in Wales. [Interruption.]

Y Llywydd / The Llywydd: Okay. Okay. Janet Finch-Saunders, if you can continue and if Members can be quiet, please.

Janet Finch-Saunders AC: Amgueddfa Cymru have had their funding cut—£2 million—funding for the National Library of Wales cut from £11.8 million to £11.1 million, Cadw from £9.2 million to £7.4 million. There's more. The Royal Commission on the Ancient and Historical Monuments of Wales cut from £1.7 million to £1.4 million. Sport Wales cut from £23 million to £20 million. This is all despite the fact we sit here during lots and lots of Plenary meetings where you're doing all you can for Welsh sport. The organisations that provide a lifeline and a platform to our truly unique Welsh culture under siege by Welsh socialists and Welsh nationalists.
It gets worse. The land and environment of Wales are being targeted too. Fisheries cut from £4.6 million to £3.6 million. Investment in promoting Welsh food and industry development down from £7 million to £4.8 million. The climate change portfolio budget slashed by £50 million, this at a time of a nature and climate crisis. You are cutting the clean energy budget from £9.7 million to £2.8 million. We should be using all our levers, you tell us, at our disposal—[Interruption.]—to help unleash—. Did you want an intervention?

Julie James AC: Yes. Why didn't you vote for the clean air Bill if you care about climate change?

Janet Finch-Saunders AC: Because we don't want to pass more road charges on to our—[Interruption.] We should be using all our powers and levers at our disposal, you say. You criticise our Prime Minister, the Rt Hon Rishi Sunak MP—[Interruption.]—for his—[Interruption.]—for his pragmatic approach, yet you are cutting money to this budget, so it would be nice to know today whether this budget will now undermine the ability of your Welsh Government to achieve net zero.
More details on the positive increase in spending to NRW are needed, a breakdown of that extra money. That's a very good increase on that budget. Will it provide those extra jobs, though, that we have been told during our committee inquiry are needed for NRW to perform better?
Since 2006, the average percentage that the Welsh Government's spent on housing has been just 2.2 per cent per annum. You haven't built the houses; you haven't brought empty properties back into stock, and—[Interruption.] Well, handfuls. We have got hundreds of thousands and you've brought handfuls in. The Chartered Institute of Housing Cymru are right that the spend does not reflect the seriousness of the housing crisis. At what point will you remember and respect the housing crisis that we have? Eleven thousand, two hundred and eighty-eight individuals in temporary accommodation and 3,409 children. It's absolutely disgraceful that in 2024 we see families living in poverty in hotel rooms and B&Bs. The number of individuals rough-sleeping is at its highest level since 2020.
Private landlords are leaving the sector, forcing more into inappropriate and costly hotel rooms. Homelessness is being fuelled by a lack of affordable housing and the financial pressures faced by registered social landlords and local authorities. The Welsh Government say they recognise their failing to end homelessness in Wales by increasing the homelessness support and prevention budget line from £46 million to £214 million. It's absolutely insane that in this day and age you're prepared to throw money at keeping people in hotel rooms and B&Bs rather than building the housing stock, the rented social housing, the affordable housing. People don't want to live in a hotel room. They deserve a home like all of us have here.
Ultimately, though, it's the people of Wales that are being failed. Failed by Welsh Labour, failed by Plaid Cymru, and failed by their joint co-operation agreement. An unnecessary increase in the budget for universal free school meals of £22.5 million. Those who can afford to pay should be empowered to do so, and also I know of schools in my constituency now, despite the fact that they could have free school meals, that are still sending children—

Rhianon Passmore AC: Will you take an intervention?

Janet Finch-Saunders AC: Yes, go on then.

Rhianon Passmore AC: How can you empower people who can't pay to pay?

Janet Finch-Saunders AC: I didn't say that. I said those who can't, fair enough, but there are people who can afford it. I would imagine that anybody here whose children go to school can afford to pay for their school meals. [Interruption.]
As the official opposition in this Senedd Cymru, or Welsh Parliament, though lower in voter numbers here than your two political parties combined, I am proud as a Welsh Conservative on these benches, and we will continue to robustly challenge, scrutinise and oppose this mismanagement of the funds provided by the UK Conservative Government. We will stand up for the interests of our residents if you won't. Diolch.

Peredur Owen Griffiths AS: This draft budget brings into sharp focus an uncomfortable reality that has been apparent for some time. Local government in Wales is in a state of existential crisis, with councils facing an estimated funding gap of £354 million through the next financial year, which is predicted to increase to £750 million by 2027. It is beyond doubt that local government finances are on an utterly unsustainable trajectory. We welcome the Welsh Government's commitment to maintain the average uplift in the local government settlement at 3.1 per cent, as well as the introduction of the minimum floor to the revenue support grant. But in the context of stubbornly high inflation and energy costs, the sad reality is that simply maintaining the settlement uplift amounts to a real-terms decrease in local government spending. Even with sizeable hikes in council tax to mitigate these pressures—perhaps as much as 10 per cent in some areas—we will still be in a position whereby local authorities are barely able to provide even the most basic level of public services.
The impact of over a decade of Tory-driven austerity and underinvestment from Westminster has been—[Interruption.] I've only just started, sorry. [Interruption.] We recognise that this has constrained the ability of Welsh Government to support local government. As Rhun has already mentioned, councils across Wales literally cannot afford the prospect of a Tory party being in power beyond 2024. It's vital that their disastrous dogma of austerity is finally consigned to the dustbin of history. But as a Government-in-waiting,the Labour Party also has a responsibility to provide a clear pathway towards the restoration of our beleaguered public services, and as things stand, they're clearly failing our local authorities.
The First Minister's continued belief that a change of Government at Westminster will bring with it a dramatic reversal of fortunes for Wales is not rooted in reality. On numerous occasions, Starmer's refused to pledge a fair funding deal for Wales and he subscribes to a repackaged version of austerity. In the meantime, the threat of further cuts and even bankruptcy will loom large over local authorities. At the tail end of last year, Labour-runMonmouthshire County Council raised a warning of a severe risk to its future due to funding pressures and, no, they are not the only ones in this position. I'd be very grateful, therefore, if the Minister could confirm whether any work has been undertaken by the Welsh Government into the short-to-medium-term risk of bankruptcy for Welsh local authorities. What contingency measures are in place to deal with such a scenario?
While it is very easy to be negative about the future prospects facing local authorities, we should also be prepared to learn from the resilience and good practice that has been shown by local authorities, such as the Plaid Cymru-run Ynys Môn. This council, under the excellent leadership of Llinos Medi, really stepped up during the pandemic and have essentially remained on a war footing ever since due to the unprecedented cost-of-living pressures. Local government is the foundation of our civic society and, as such, it is essential that it is valued according to the allocation of public finances.
I'd now like to turn to another aspect of the budget, namely the decision to reduce non-domestic rates relief to 40 per cent. It is entirely understandable that the business sector in Wales, which continues to be adversely affected by the aftershocks of the pandemic and the ongoing cost-of-living crisis, has greeted the news with considerable dismay. What is the Welsh Government's assessment of the impact of the reduction of the NDR relief to the vitality of our business sector? How are you ensuring that domestic SMEs are the primary beneficiaries of Government support? And, from a broader perspective, I have long held the view that the NDR is a blunt policy instrument that is particularly burdensome on our SMEs, the backbone of our economy. Would you therefore consider an alternative, more progressive measure that does not pile more pressure on businesses struggling to survive the cost-of-living crisis?
I look forward to scrutinising the budget in much greater detail in the Finance Committee and I'm sure you all will do the same in your respective committees to really get under the skin of this budget and test the decisions made by this Government. Diolch yn fawr.

Carolyn Thomas AS: As the Minister said, the Conservatives have given us a decade of austerity, a botched Brexit and Liz Truss. Taxes are the highest since the 1940s, but public services are starved of cash. Any extra over the last three years has fallen into the black hole of inflationary pressures. The settlement isn't enough to manage the pressures we're facing as an older, sicker population with higher inflationary pressures and people at risk of being homeless just not being able to manage with the cost-of-living crisis.
Councils are in a dire situation; they've done all the savings they can, rationalising and restructuring, increasing fees and charges, including council tax. They may scrape through this year borrowing from Peter to pay Paul, causing devastation in the communities they have tried to protect. I know that some are relying on a change of UK Government with an end to austerity, which may come too late, as a late election may come this year, but they're also planning section 114 notices and bankruptcy if nothing changes for next year. And it's not just the councils here; six councils in England have filed for bankruptcy and at least six others are considering it. The autumn statement under Jeremy Hunt was the final nail in the coffin for councils, saying the UK Government wanted a smaller public sector, even more productivity and efficiency; there is nothing left to give.
The Prime Minister reiterated it recently, saying that benefits will again be under attack as he said he wants people to make working pay, but most people on benefits are working. Many people rely on benefits and public subsidies throughout their lives without realising it; whether it's child benefit, council tax reduction schemes, pension tax credit, farm payments, bus passes, they're all subsidies.
And although we shouldn't be fighting over the crumbs, I will be asking the Minister to look at the funding formula again. Being in the bottom quartile over many years does have a cumulative impact, and I do question why Welsh Government are using current data for younger people but data that is over a decade old for older people, which then impacts on spending for social healthcare. All data should be refreshed and up to date, and I ask the Minister if that could be looked at.
Council tax used to be 24 per cent of the budget; the rest came from Government. Now it's 30 per cent of the budget. Less money from UK Government to devolved Governments in real terms equals fewer services and higher council taxes to close the gap. Councils are asking if the fire service levy could be shown separately to council tax—it would help them.
If funding had kept pace with growth in the economy since 2010, the budget for Wales would be £3.5 billion higher. The amount Welsh Government can spend on capital projects such as buildings, roads and broadband is limited by the UK Government, and so is borrowing. Broadband and railway infrastructure are not devolved, and are not fairly funded. But time and time again, money seems to be found down the back of the sofa for England, and without consequentials for Wales. There needs to be greater transparency. I noticed that the Department for Transport recently published funding for London boroughs to resurface roads, thanks to redirected HS2 funding, saying that it's part of the Network North transport plan. So, where's the funding for Wales and our network? In Wales, we do need to be honest when there is no funding for roads. When it was decided to review the building of some roads under climate change, saying that that funding will go into the maintenance of existing ones and public transport, we should be honest and say that there is no money from UK Government.
We desperately need more money put into the housing support grant to prevent people becoming homeless. That is desperate. We need to be dealing with the climate and nature emergency—that's desperate. But we should not be fighting over crumbs of the budget for public services when it's too small to start with. We should be fighting for an end to 15 years of austerity and an end to cuts to public services.

Samuel Kurtz AS: I'm pleased to participate in this debate today—one that is exceedingly important on many levels, particularly given the timing of the release of this draft budget, which thus far has allowed for only limited scrutiny.
As I said during a debate just before Christmas, farming is the silver thread running through the fabric of Wales's national identity. Welsh agriculture is not only a vital part of our economy, but it is part of our rich culture, protecting both our language and our environmental beauty, whilst also producing food of the highest quality. This is why, Llywydd, I am confident that, alongside the farming unions, farmers across Wales will have breathed a sigh of relief that the BPS will be maintained at £238 million through the 2024-25 financial year, following the persistent calls from myself and colleagues on these benches.
Ensuring our farmers have this important support, which, as I have said before, is so crucial to our local communities across Wales, means our farmers have been provided with some security for the next financial year. As we know, from the £238 million given to farmers via BPS in 2022, a gross output of £2.1 billion was generated for the wider economy—a return of 9:1 on public investment. It's a staggering figure that underscores the importance of supporting farm businesses towards sustainable farming practices and ensuring that long-term viability of Welsh agriculture.
But despite this glimpse of certainty and security for our farmers via the BPS, the Welsh Government have thrown uncertainty in the direction of Wales's agricultural industry. Rural affairs has seen a cut of £62 million—a reduction of around 13 per cent compared with the final 2023-24 budget—at a time when the Welsh Government should be promoting and investing in Welsh food and produce, creating jobs in the sector, and supporting farmers as they produce and protect.
Llywydd, these wider cuts will have serious implications for the industry as we look towards the start of the sustainable farming scheme in January 2025, and the Habitat Wales scheme, which began earlier this month. NFU Cymru president Aled Jones said:
'clearly a cut to the overall Rural Affairs budget is concerning and does have implications for the delivery of programmes within the Minister’s portfolio',
with FUW president Ian Rickman adding that
'The cuts made to Wales’ rural affairs funding in the Welsh Government’s draft budget for 2024-25 are a serious cause for concern'.
The irony is, Llywydd, that the cuts to the rural affairs budget jeopardise the very aims, the very objectives that the Welsh Government have set themselves when it comes to supporting the industry to achieve environmental targets. Farmers are continually being asked to do more and more and more, and are yet getting less and less and less from this Welsh Government. We've seen only in the last few days the protests in Germany, which happen when a Government pushes farmers and the farming sector too far. The Welsh Government is walking a tightrope with its relationship with the farming industry. Stray, even by just a millimetre, and I'm sure farmers will make their frustration and anger known in similar ways. Diolch, Llywydd.

Delyth Jewell AC: I'd like to focus a little on transport. In the six months between last October and April this year, Transport for Wales rail services will have received an additional £236 million from the Government. That is an amount equivalent to almost all of the £245 million in funding cuts that have been made across almost all policy areas as part of this budget. I'm a person who greatly supports spending on public transport. But I'm also keen to see Transport for Wales justify these high levels of spending. On almost every performance metric, it seems that Transport for Wales is being rewarded for underachievement. It has received the lowest levels of satisfaction in the most recent surveys undertaken by Transport Focus. Its trains are only on time 60 per cent of the time, it has some of the highest cancellation rates in these isles, and carriage overloading is an ongoing problem. Of course, we recently found that only 29 per cent of journeys take place on new trains, despite the fact that there was a target of 95 per cent by the end of 2023. When we asked the Government for an explanation regarding the additional funding of £125 million at the time that had been set aside for TfW in October, the Government said that this was supposed to make up for losses in ticket sales. I understand, and I think everyone understands, that COVID has had a staggering impact—that was inevitable—but almost two years since doing away with the last set of COVID restrictions, passenger numbers still haven't reached the point where this additional extra support from the Government is not needed.

Delyth Jewell AC: This, Llywydd, isn't a problem that's been replicated uniformly across the UK. As the Wales Governance Centre has revealed, there are four major UK train operators that have already been able to exceed their pre-COVID passenger numbers. I'm asking this because I want to know, sincerely, if they can do it, what the barriers are preventing TfW from doing the same. I think part of the issue here is that the projections of revenue from ticket sales we had in Wales were based on the KeolisAmey bid in 2018. They've been described in the Welsh Government's own narrative on the budget as 'ambitious'. When we submitted a freedom of information request for the relevant information that underpinned these projections, we were told that the Welsh Government doesn't currently hold that information. That is rather troubling, given how profoundly it's affected the wider state of the budget. I'd ask, in the interest of transparency, if the Government will commit to acquiring that information that led to those projections, and publishing that information as soon as possible. I'd furthermore ask if the Government could explain why the funding arrangements for TfW were based on these ambitious projections. Where there more conservative estimates supplied as part of the KeolisAmey bid in 2018? And if there were, why where those discounted?
Of course, while these vast quantities of money are being used to plug holes in the TfW rail budget, bus services are being starved of funding. Over the weekend, we learned that the T2 bus service through Garndolbenmaen has been axed at short notice. At the end of last year we witnessed the closure of the Bwcabus service that connected some of the most isolated, geographically, communities in south-west Wales. These are only a few examples of a wider pattern of the erosion of bus services, particularly in rural areas that don't have access to the rail network, or indeed Valleys communities, where car ownership is proportionally far lower than in cities. This is not a question of urban versus rural. Many communities rely on bus services to live their lives. People's quality of life is affected severely in so many places when buses don't run. There does seem to be a disconnect here in the Welsh Government's approach to funding public transport. Again, I wholeheartedly support the funding of public transport as this principle, but whereas the uplift in rail funding has been justified on the basis of the ongoing impact of the pandemic and the need to boost passenger numbers, that recent withdrawal of the bus emergency scheme shows that bus operators haven't been granted the same latitude. I would just caution that without urgent action to develop a fair and longer term funding model for bus services, this year will see Wales become more disconnected than ever before. I would just seek reassurance that that won't happen. Diolch.

Jane Dodds AS: Let me begin by stating how I welcome the commitment the Welsh Government has made to the NHS and local government within this draft budget. I additionally welcome the decision to maintain the basic payment scheme for farmers, despite the loss of replacement EU funding. I'm also pleased to see the basic income pilot being supported with additional funding, ensuring that our most vulnerable care-experienced children have the best opportunities going forward in this cohort.
I want to just briefly highlight three concerning areas of the budget: rural affairs, schools and the proposal around potentially increasing dental fees. Firstly, rural Wales in particular is set to suffer the brunt of these cuts, with a more than 10 per cent drop in the rural affairs budget in real terms and a £40 million withdrawal from rural investment schemes. This hits at a major transition point for our rural communities, with thousands of farmers facing a cliff edge with the ending of Glastir payments and future funding uncertainty. This latest budget cannot help but cause alarm and further erode confidence that rural contributions are valued by the Welsh Government.
Secondly, while the budget maintains core school funding, it does not alleviate the financial struggles that schools report across Wales. The Welsh Local Government Association warned schools are facing inflationary pressures totalling £177 million this year, and potentially £114 million next year. According to the chairs of governors associations, most schools expect to post deficits for the 2024-25 year, inevitably leading to reduced quality, staff burn-out, less maintenance, and, sadly, redundancies. Bold reforms are needed to tackle this crisis, such as broadening the eligibility of the pupil development grant, which our party introduced in 2013 to provide direct cash to schools to meet their priorities and children's needs.
Finally, in the draft budget, there is a proposal to raise public service fees like dentistry charges. Thousands are already struggling to access local NHS dentistry, and facing dental emergencies by paying substantial sums, or travelling long distances, or even attempting DIY treatment. Nearly a quarter of the people who tried to get a local NHS dental appointment in the last year couldn't get one. Our priority should be investing in increasing NHS capacity and affordable access, not pricing more people out of basic dental care.
Finally, while we all understand the difficult trade-offs made as part of the challenging financial situation, we cannot neglect how this will impact ordinary citizens relying on public services while contending with the cost-of-living crisis. So, just to finish, I would be interested to hear the Minister's comments on the above points—and I realise she has a very long list of things to respond to—and also to think about how we do raise income here in Wales, including the potential to look at our own tax-raising powers. Diolch yn fawr iawn.

John Griffiths AC: Within the limited funds available after so many years of austerity from the UK Government, I think all of us here should recognise—although, obviously, not all do—that this is an extremely difficult budget for the Welsh Government to take forward. But although that is so obviously the case, Llywydd, I would nonetheless like to flag up a couple of priorities within the great difficulty and the limited resources that are available for Welsh Government spending.
The first of those is flooding, Llywydd, because, as we have once again seen recently, flooding is a very real risk to life, limb and property here in Wales. In my own constituency, I've been very pleased to see investment by the Welsh Government, with partners, to improve our flood defences, for example in the Lliswerry area, where the River Usk has seen some very important measures to improve flood defences that protect over 2,000 properties. That work is ongoing at the moment, and there are other important examples in Newport East that we're really grateful for. But nonetheless, there is ongoing flooding, and obviously the impact of it on families particularly is very great. Recently, for example, we saw surface water flooding in the Underwood, Bishton and Langstone areas of Newport, where the drainage just isn't sufficient to deal with the volume of surface water. Very often, Llywydd, we get into a situation where different agencies are looking to others to bear responsibility, and it's not always clear who should do what. So, I think part of the work that's necessary and necessary to be funded is to bring partners together to look at how communities are not just better protected but better prepared. Part of that is recognising where responsibility lies, and I hope that Welsh Government projects are increasingly able to do that. Of course, it is about working with local authorities, NRW, Welsh Water and some of the major infrastructure companies such as the railways to ensure there is that combined approach and that partnership approach to dealing with the risk. It's about making better use of money as well as making sure there is enough money.
The other area I'd like to concentrate on is 14 to 19-year-old education in Wales, where I do believe we should have funding for greater opportunities for partnerships between schools and colleges. Very often I think we see that years 10 and 11 do not have sufficient choice available to them when it comes to vocational education. Very often, they're expected to stay in schools that are not able to provide the sorts of choices that they want, rather than partnerships being better funded to enable them to go to college and have the education that they desire. So, then, keeping them in schools is a real problem, and we know how difficult it is in terms of the current absentee rates. And if they do disengage, then they're not keeping up their literacy and numeracy education, and when they then leave school and perhaps decide to go to college, they're not always in the position of having the necessary literacy and numeracy skills to do the courses that they want to do. So, it's a real problem, I think, for education, for training, for skills, and for our economy, and obviously a very real impact on those students, their families and communities. I know that ColegauCymru would like to see greater action on this front, and they've set out some interesting proposals, including those around youth apprenticeships.
So, I hope that within, as I say, the very great difficulty that we have, it might be possible to look at those two areas and ensure that we can properly fund those areas of activity that I believe are real causes for concern. Diolch yn fawr.

Gareth Davies AS: It's a pleasure to take part in this debate this afternoon. I'd like to raise my concerns regarding how this budget will affect people and businesses in the Vale of Clwyd. I'm pleased that I finally have the opportunity to do so after the Christmas recess. I was disappointed to hear the Minister for Finance and Local Government discussing the budget on BBC Radio Wales just before Christmas, before it was announced in the Chamber and before the Senedd to where she's elected had the opportunity to scrutinise. I think many Members would've been happy to discuss the budget at the end of Plenary either on Tuesday 12 December or Wednesday 13 December.
But putting that aside, I'm concerned regarding the effect this budget will have on small and medium-sized businesses, which constitute 99.3 per cent of all enterprises in Wales. Productivity in Wales has been low since COVID-19, being per capita behind the nationalpost-COVID average. A 2021 report from PwC stated that the only part of the United Kingdom with lower productivity than Wales is north-east England. The report also shows that productivity is buoyed by Cardiff. The figures in north Wales are more dire, unfortunately. The Welsh Government should be doing what they can to give businesses room to breathe and recover to pre-COVID levels, but as a consequence of this budget, the growth of small businesses will be stifled and the slump in productivity will only get worse, unfortunately.
This budget is a prime example of the Welsh Government acting as the authors of their own misery: stifling economic growth with cuts to the funding of business rates relief, saddling people with more taxes and then complaining that there isn't enough money to go around. Tax revenue will only continue to decrease if we do not get people back into work, and remove the yoke from small and medium-sized businesses. Any area of Government spending that aids in the revival of the economy and gets more people into work should never be cut, because without this we won't have the money to fund anything else.
Yet, we have seen business rates relief lowered to 40 per cent, significantly lower than the 75 per cent offered by the UK Conservative Government. This puts Wales at a huge disadvantage, and small and medium-sized businesses will be particularly despondent to see funding pulled out for rate relief whilst still investing millions into an universal basic income pilot scheme, equality, inclusion and human rights initiatives, and many other non-essential areas, including also funding for pet projects such as blanket 20 mph restrictions and 36 more politicians in this place.
People in my constituency want to have access to high-quality employment in a thriving business that can afford to pay them a good salary. People in the Valeof Clwyd would prefer to be in a position where they can expand the list of 20 mph exemptions to a common-sense level, and have a directly elected Member of Senedd beyond 2026, rather than causing more electoral confusion and over-representation at the expensive of ordinary working people who already have a Member of Parliament, an MS and, in some wards, five elected councillors serving their locality at much cost to the taxpayer at a combined level. [Interruption.] No, no, we've had a long debate. 
And just as a footnote to the blanket 20 mph—[Interruption.]—if you would care to listen, of course—

Y Llywydd / The Llywydd: I can't hear the Member.

Gareth Davies AS: —was the news this afternoon in the local press in my constituency that the X51 service, the Arriva bus service from Rhyl to Denbigh and then, indeed, Denbigh to Rhyl, has been axed by Arriva Buses Wales because of the 20 mph policy. They're not my words, they're the words of Arriva Buses Wales who have cut the services, much at the behest of my constituents, and my constituency has a high volume of elderly people who rely on these services on a daily basis. And this, unfortunately, is the result of this Government's bonkers blanket policy.
The only part of this budget that will be welcomed in the Vale of Clwyd is increased funding for transport, but it will remain to be seen how this money will be allocated. I can only hope that some of this increased spending will be seen in north Wales, but maybe I'm being a bit too ambitious given the record of this Government.
To close, Llywydd, the Vale of Clwyd overall has precious little to celebrate with this budget, and I can only hope that the Welsh economy continues to recover in spiteof the hurdles that are continuously being placed in front of it by this Government.

Mabon ap Gwynfor AS: Well, perhaps if the UK Government hadn't spent up to £9 billion on dud personal protective equipment, there might be some more money for Wales, but, nevertheless—. The Welsh Government has clearly framed this budget as one that places the health service at the forefront of upcoming spending plans. But as my colleague Rhun ap Iorwerth has already indicated, when you scratch the surface you soon realise that the money being redirected to health from other policy areas is not additional investment, but merely a short-term sticking plaster solution for budgetary gaps that have been allowed to fester over many years.For example, the £425 million that's been committed to health should be contextualised against the fact that the combined budget deficit of the major Welsh health boards has ballooned to over £150 million, in violation of the statutory duties that were introduced by this Government.
The cumulative deficit for each individual health board over the most recent three years’ reporting period is eye-watering. We need a clear strategy for making the NHS more cost-effective at board level, and in the interest of learning lessons, the Welsh Government must explain openly and honestly why health board deficits were left to grow for so long, even prior to the outbreak of the pandemic.
Then there’s the record spend of £325 million on agency staff, of which almost £225 million was spent to plug existing gaps in a perennially overworked and undervalued workforce. The demographics of the health sector workforce at present provide little comfort in this regard, either. For example, we have an ageing general practitioner population that requires 200 extra GPs per year to counteract this trend, a goal that has never been met by the Welsh Government. Wales is also expected to have a 41 per cent shortfall in oncology staff within the next four years, the highest by far of all the UK nations. The fact that money is being shifted from so many preventative programmes to front-line services is also alarming. It will create a vicious circle where more and more resources get sucked into the front line while inhibiting far more cost-effective ways of preventing people from getting ill in the first place.
I’d be grateful if the Minister could confirm whether the Government has undertaken a risk assessment of the implications of these reductions to preventative programmes such as anti-obesity and anti-smoking campaigns and the medium to long-term consequences for the demand on front-line services. In the meantime, even with the combined £875 million that front-line services will be receiving in the space of six months as a result of this budget and the rebudgeting exercise in October, there is little sign that these vast sums are delivering tangible improvements in the quality of care. The latest statistics show that combined waiting lists in Wales hit a record high of 191,447 people in October. That’s over 6 per cent of our entire population that are currently stuck waiting for treatment. Taken as a whole, therefore, it’s difficult to come to any other conclusion than funding structures for health, which already consumes 50 per cent of the total Welsh Government budget, are on a completely unsustainable trajectory, and that we’re rapidly approaching the point of no return.
So, does the Welsh Government have a clear plan to place health funding in Wales on a sustainable footing, or are we destined to be stuck in a negative spiral whereby larger and larger proportions of the Welsh budget are simply thrown towards short-term, sticking-plaster solutions?
And thinking about preventative measures, there is no more important intervention that this Government can make to help tackle numerous health problems than to drastically improve the housing situation. Housing is a public health issue and should be treated as such. There are long-term solutions that, if boiled down, could simply mean building more municipally owned houses at a scale that we have not seen since the post-war period, but I see nothing in this budget that shows any ambition in this respect. But in the immediate short term, there is an urgency to see the housing support grant increased. The Minister and her colleagues in the Government must surely realise the impact of this. Homeless support services and domestic abuse services are being withdrawn, with increased risk of homelessness and even manslaughter. These services are literally a lifeline for many people—people who might not realise that they’re vulnerable, but who are suddenly thrown into a brutal spiral through no fault of their own. Housing support grant is now £24 million less today in real terms than what it was 15 years ago. Properly funding the homeless support grant will save money for our health service, the police service and numerous other key services. This is the ultimate preventative measure, and I urge you in the strongest possible terms: will you look at this funding again? Diolch yn fawr iawn, Llywydd.

Huw Irranca-Davies AC: There are never easy times in budgetary decision making and setting priorities, but these seem to be the most difficult and possibly the most painful in all of the devolution years. But it isn't just a devolution issue—far from it. If we look across the border at local authorities in England, we see that, as far back as last October/November, six had already declared S114 notices, effectively declaring themselves bankrupt. And local government leaders in England suggest that as many as one in five over the next 12 months will indeed follow the same course. Back in November the 42 integrated care systems in England, the NHS provider trusts and local care boards were reporting deficits to the tune of £1 billion. Something is happening right across England and Wales and other parts of the UK, and it's important to raise this issue because it's often pooh-poohed. There is an umbilical cord between the decisions that are made in Westminster by the Conservative Government and what happens here. That is the way this works.

Huw Irranca-Davies AC: The majority of our funding continues to come directly from the UK Government as a block grant. We cannot ignore the fact that if our budget, as has been pointed out by Carolyn a moment ago, had kept pace with the growth of the economy since 2010 we would have had an additional £3 billion to spend on public services and support for people and businesses in Wales in the year ahead. Instead, we're facing a £1.3 billion real-terms reduction—as Mike has said, pretty much 5 per cent across every budget area, if you did it that way, since our budget was set in 2021. And we were meant to be grateful for a slight uplift of £165 million last year.
This is a decade and more of austerity, with the occasional crumbs being thrown towards us. The 2024-25 draft budget is the most stark and painful budget in terms of setting priorities for Wales in the whole of the devolution era. We do not have an adequate funding settlement for Wales. It does not reflect the extreme pressures on services caused by rising demand, as we've heard, persistently high inflation because of economic mismanagement, as well as other factors—unfunded public sector pay increases that Wales is told to just get on and find the money for, and higher energy bills and so on. One point three billion pounds less we have in real terms to find today, there.
So, in that situation, I have to say, the decision to put forward £450 million extra to support the NHS in the year ahead is the right one. And this is on top of the additional £425 million that was made available in the previous round of setting the budget. Putting that increased funding forward for the NHS in Wales by more than a 4 per cent increase in 2024-25 compared, by the way, to less than 1 per cent, I understand, in England—it's the right decision. It's still going to be difficult, massively difficult, for our health providers, but it's the right decision.
And also the right decision to protect the core local government settlement. It's still going to be horrendously difficult for every local authority in Wales, as it is in England. There is a common thread here. It's that umbilical cord. We're being underfunded and we've been underfunded year after year since 2010, but that will impact. Protecting that core local government settlement will help protect the funding for schools and social services, social care, the bin collections—. When people say to us, 'What do local authorities do?', it's the unseen stuff that they do. I've had people say to me, 'Well, I don't have children in the school, so why should I pay for that?' 'Well, it's those children that go on to work, and go on to do the jobs and pay the taxes that actually keep you in your pension and so on.' 'Well, I don't rely on social services.' 'Well, one day you will.' That's the thing, and protecting those is vitally important, as are things such as the real living wage for care workers as well. And I'm really delighted to see that there will be the maintenance of spending on things such as advice services and the discretionary assistance funds. These are essential areas of emergency support, and heaven knows, with the crisis that we currently have in the cost of living we need that support here in Wales, and that's a good area to prioritise funding on as well there.
I just want to close, Llywydd, by saying: this is in the picture of the wider UK economic picture. Despite the fact that the Conservatives would like us to ignore and just say, 'Well, this is all to do with Welsh Government', that umbilical cord is very strong and so is the way that the UK Government sets the UK economic trajectory. And what have we seen? We've seen now that living standards are going to be 3.5 per cent lower in 2024-25 than pre pandemic. We are now facing, as has been much reported, the largest reduction in living standards since records began in the 1950s. The UK's tax burden, despite what Rishi Sunak was saying this week, is now forecast to increase to a post-war high. [Interruption.] No, I'm sorry, I asked three times to intervene on Conservative colleagues and three times I was denied. I'm repaying now the courtesy. [Laughter.] [Interruption.] I know, Janet, you'll probably be the only one.
So, we now have a post-war high of UK tax burden, with millions of people dragged into that. Economic growth has stagnated over the 13 years of UK Conservative government, and a decade and more of austerity and a botched Brexit has left public services across the UK reeling. That is where we are. So, the Conservatives have trashed our economy. They've done their best to trash our public services, despite the efforts of those who work within it, over 14 years. While we wait for a better Government in Westminster—I have to say, a Labour Government—to repair the damage of these wasted Conservative years, I ask our Minister to work with our partners and with communities across Wales to do our very best to stand up against the damage of Conservative Westminster Governments.

Laura Anne Jones AC: Thank you for your statement, Minister. It's good to have the opportunity to speak in this debate, but, once again, I find myself speaking in another budget debate having to talk about cuts to Welsh education. It beggars belief when the sector is crying out for help and children's education is on the line. This year, we see a cash-terms reduction of £56 million. In real terms, this represents a £140 million reduction. Let's see what Labour views as expendable. Teacher development and support has seen a significant cut to its budget, being reduced by £24.25 million, going from £54 million to £29.9 million, at a time when there's a worrying shortage of teachers and a need to ensure that we upskill teachers to react to the sharp rise in the numbers of ALN learners presenting with more complex needs in mainstream education. At a time when we see a widening attainment gap, tackling barriers to attainment has also seen a significant cut of over £100 million, dropping from £142.5 million to only being allocated just under £14 million. The additional learning needs resource budget allocation has been slashed by 86 per cent, going from £25.5 million to £3.5 million. Yes, you've said you've sent some directly to schools, which I've pressed for for a couple of years now, but is it going to be what is needed? Will it really be enough to plug the enormous gap in our school budgets to meet the rising demand in ALN numbers? I doubt it. And when it comes to the Welsh language, the Welsh Government are massively off target to reach their 1 million Welsh speakers by 2050, yet, Welsh in education has been cut from £20.7 million to £16.9 million. We support the building of more Welsh-medium schools to offer choice to families, but you just don't have enough skilled teachers in the core subjects to be able to deliver those core subjects in the medium of Welsh. Surely, this is where you should be putting your money.
Whatever way you look at this budget, it's clear to see that this Government views education as expendable. Schools are facing the bleak prospect of year-on-year cuts to their budgets, yet, what do we see from this Government? More politicians, 20 mph blanket speed limits, gender self-ID and a tourism tax. And to add insult to injury, you sent millions of pounds back to the UK Government instead of spending it on the people's priorities. School budgets are so stretched and they don't have the funding for specialist teachers, or training to deal with the crisis that they have on their hands or the issues they're facing at the moment. Supporting the most vulnerable in our society—surely that is something that should be a priority of this Labour Government. However, this Government actively chooses to prioritise their pet projects instead. The UK Government can afford to fund education—its highest levels ever—and yet, in Wales, every year, we are seeing the education budget slashed, and our programme for international student assessment results are appalling.
The Government has become very adept at issuing new guidance and piling extra work on schools without the additional money to follow it. You ask our schools to do more, but you give them less. All this has left us with is overworked staff and schools having to relentlessly cut crucial teaching assistants and support staff. As I've said before to the education Minister, Matthew Gilbert, headteacher of Barry Island Primary School, described the financial pressures on schools as frightening. He said:
'I’ve had over 20 years in education and I’ve never experienced such difficulties with finance.'
Were these words heeded? Clearly not. Dr Martin Price, chair of the Vale of Glamorgan school governors' association said:
'Quite a proportion of schools in Wales are running on empty or effectively, in private sector terms, are bankrupt.'
But you're not listening. You're not listening as a Government. This budget you've produced fails on all metrics, yet we have an education Minister who is trying to become First Minister on the back of these failures in education in Wales, putting our children and young people at a disadvantage compared to the rest of the UK, with shocking PISA results, which are a direct result of you putting money in the wrong places and cutting it where it is most needed. This budget you've produced is appalling.
Yesterday, the education Minister announced his election leadership promises, which I have to admit took me by surprise, Janet. He promised to invest in education, yet he's had years to do this. All we've seen are cuts to his portfolio. It is clear from my conversations across Wales that schools aren't happy, your unions aren't happy. This Government and their bedfellows Plaid have failed a generation of learners, and yet this education Minister stands there and parrots the same lines back to me week after week with little or no action in the key areas that is needed across our education sector that are crying out for help just to deliver the basics in education. Now, instead of listening and helping the sector, you've cut the education budget once again. It's appalling.

Llyr Gruffydd AC: Just a few comments from me on the rural affairs budget. Clearly, I, like others, want to welcome the fact that the basic payment is being protected. The £238 million does provide some assurance and stability for the sector, but of course we have to bear in mind that, simultaneously, farming costs have increased by 40 per cent in recent years, so the real-term value of that direct payment is reduced, and it comes at a time when the Government is asking the sector to deliver more—more in terms of food security, more in terms of tackling climate change, and more in terms of nature recovery, which are things that, of course, we all support. But doing more with less is unsustainable in the longer term.
Now, in the next financial year, we, of course, will see a year of great change, unprecedented change in the agriculture sector in Wales, a move from the old common agricultural policy system to the new sustainable farming system. It's a once-in-a-generation change, it's the greatest change for 50 years, without a doubt, in terms of support for this sector, and I am concerned that the broader cuts to the rural affairs budget will undermine the support ecosystem for the sector as we transfer from one regime to another. There will be questions about the advice services, knowledge transfer, Farming Connect, the bespoke grant programmes available to support that transformation in the sector. So, the timing, I think, brings with it a risk, and I do regret that the Government hasn't perhaps done more to protect that broader budget because of the fact that this change is happening now. Perhaps in a few years' time, when things were settled, there might be more scope to look at restricting this budget. But I would once again plead with the Government and urge both Ministers to sit down and to consider whether it's possible to ensure that, at this unstable, challenging time, we could maximise the support for the sector.
You've acknowledged that in terms of the direct payment, but I do think that more needs to be done in terms of ensuring support for the sector as we move from one regime to another. And yes, it's quite right to point the finger at the UK Government breaking their word on funding for the sector in Wales. That has angered and disappointed the sector, as it's angered and disappointed many of us here in this Chamber.
But I was also disappointed before Christmas. I put a question to the Minister for rural affairs on the £20 million allocated for investment in infrastructure to meet the additional requirements around water quality regulations. I welcome that investment;' I was part of ensuring that that investment was made. I asked whether she was confident that that would be spent to support the sector to meet the standards, and the answer I got was, 'Well, what I said was "up to" £20 million.' That could mean £1 million, it could mean £2 million.
And the point I'm getting to in my contribution is, in reality, if the Government says £20 million, and allocates £20 million, then I do think it's reasonable that we as Members should expect those figures to be meaningful, and that there is an intention, with every effort made, to ensure that that budget is spent in that way. So, it's a plea to you as finance Minister to ensure that, when you allocate funding, it is meaningful and that they are figures that we as Senedd Members should reasonably expect Government to make every effort to deliver against.

Llyr Gruffydd AC: Just to close, I want to reflect on some of the things the Minister said in her statement. She quoted the Institute for Fiscal Studies, noting that, under the Tory UK Government, the public finances have not meaningfully improved, the growth outlook has weakened and inflation is expected to stay higher for longer. We’ve heard a number of Labour Members standing up telling us how the Tories have crashed the economy. Well, I’d remind her as well that the IFS has also said, and I quote:
'Jeremy Hunt and Rachel Reeves's fiscal plans appear remarkably similar. There's not much daylight between them.'
So, a change of UK Government, as much as it’s been referred to in this debate, wouldn’t necessarily mean any change to our fiscal prospects here in Wales. It’s maybe, to paraphrase the IFS, Labour, Tory, same old story.

Alun Davies AC: I must say, I’ll start my contribution this afternoon by sympathising with the Minister. She opened this debate by explaining the difficulties facing the Government and the country in terms of the resources available to us, and she’s had to spend the last two hours listening to Members on all sides of the Chamber spending money that doesn’t exist, and it’s really quite something about how we debate, and sometimes, frankly, about the seriousness with which opposition scrutinises the Government, that we have debates of this sort, because this is nothing short of a financial emergency being faced by the Welsh Government, and we need to be serious about that, and we need to be serious about the decisions that we take in addressing the financial crisis facing the whole of this country. You would expect a serious opposition—a serious opposition—to understand the situation facing the country, and I’ll tell the Conservative finance spokesperson that serious scrutiny is not simply reading out a speech that was written before the debate began, but it’s about examining alternatives to what the Government are proposing. And what we haven’t heard throughout this debate this afternoon is a serious alternative to what the Government is proposing. And we are facing this situation not because of some sort of act of God that none of us could predict, that none of us knew about, that we’re all dealing with; we’re dealing with the consequences of decisions taken by one of the most economically illiterate UK Governments in history. [Interruption.] We are dealing with, let me tell you now, let me tell you—[Interruption.] I have listened to the Conservatives for too long, Presiding Officer. They spend every Wednesday afternoon spending money that doesn’t exist, and then, when it comes to their own debates, what they’re doing is demanding tax cuts—greater expenditure, lower taxes. Go figure, as the Americans would tell us. Go figure that.
And what we’re actually dealing with, Presiding Officer, is the consequences of the creation of a spiv economy in the United Kingdom. We are paying more taxes not because we’re getting better investment in our public services, not because we’re paying public servants the salaries that they deserve, but because we have a failed Brexit that is reducing economic growth, because we’ve had failed economic policy, because we have failed to manage a major economy properly for over a decade, and, as a consequence of that, we have broken public services that are screaming out for cash, which is being paid to pay for the financial incompetence of the Conservative Government. [Interruption.] I’ll take an intervention if the Member knows more than I do, but, frankly, no—let’s have a go.

Gareth Davies AS: Remember when Labour left office in 2010, there was a letter in the Treasury saying there is no more money, and that was the result of 13 years of a Labour Government in Westminster.

Alun Davies AC: I’ve got the advantage over the Member for the Vale of Clwyd because I’ve got a longer memory than him, and I remember Rab Butler saying something different on a different occasion. I also remember a Conservative leader who attended debates in this place called—. Nick Bourne. Nick Bourne. [Laughter.] I remember him—I do. He sat in the Chamber and listened to the debates, and he also contributed to those debates. And let me tell you, when Nick Bourne was leading the Conservatives, what you had was serious opposition, and you had serious alternatives being offered. During that time, we had the greatest financial crisis that the western economy has faced since the second world war. And what happened there was that the then Labour Government took action. And I remember the work of Gordon Brown in Gleneagles around the G20, saving the western economy. And what that did was to ensure that we had an economy in 2010 and 2011 for the Conservatives to strangle.
But let's just say this—and I won't test the Presiding Officer for too long this afternoon—you cannot pay for tax increases simply to pay for economic inactivity. The Truss budget cost the United Kingdom £30 billion—£30 billion. And we listen to the Tories saying that they want to spend more money on public services. Had we not seen that financial incompetence, then the money would have been available. [Interruption.] Oh, now we've got another intervention.

Janet Finch-Saunders AC: You talk about financial incompetence; do you have any of your constituents living in hotel rooms, B&Bs? And if you do, do you think that's a good use of public money? I don't. I believe that homes should be built for those.

Alun Davies AC: Of course it's not a good use of public money, but it's not great for a human being either. What we have to do is ensure—[Interruption.] What we have to do is invest in people. And do you know, when I look around Wales and when I look around the United Kingdom—? Let me tell you this: I spent last week driving through the European mainland, and, when I return to the United Kingdom, what I see is a place that is being diminished, an impoverished country, where our public spaces, public services and public places are reduced, where inequality and poverty now define what it is to live in the United Kingdom. And what I hope we'll be able to do through this debate—[Interruption.]—through this debate this afternoon—through this debate this afternoon—is to set the basis for a different way of managing the finances of the United Kingdom.
We need to have a needs-based—[Interruption.]—a needs-based formula to redistribute funding throughout the United Kingdom. We need an independent United Kingdom budget office to prevent UK Governments short-changing Wales. But we also—and I will finish on this point, Presiding Officer—need to talk about tax. We don't have the powers available to Welsh Government that are required to manage tax rates properly, but we also need to have an honest conversation about tax, because, if we want to see the public services that we all want to see, if we want to pay public service workers the salaries that they deserve, if we want to invest in our country, if we want to invest in our people, if we want to invest in our communities, then we need to pay the taxes that will pay for that investment. You cannot reduce taxes and expect high-quality public services. You cannot reduce taxes and still spend money every time you make a speech. You cannot reduce taxes and expect a civilised society.

Russell George AC: I would suggest, and I think in this Chamber we would agree on this, that financial resources entrusted to us should be directed towards the most pressing needs for the people of Wales. I would suggest that one of those needs, and one of the most pressing areas, is to support the state of our Welsh NHS, and particularly the long waiting times and seeing those waiting times reduce. That is a priority I would suggest for the people of Wales.
Now, we've seen a degree of protection in the draft budget for health, which I was pleased to see, but I would suggest that we are playing catch-up. We are playing catch-up not only following the pandemic, but we're playing catch-up from over a decade of underfunding towards the Welsh NHS. And we've seen the Government here make those decisions to cut the NHS budget, not once but twice in recent years, when other Governments around the UK have protected the health budget in real terms.
Now, I've listened to other contributions. I thought Mike Hedges was talking a lot of sense when he was talking about prevention. I think the Minister talks a lot of sense when she talks about the need for prevention as well. I think not many debates take place without the Minister mentioning the priority that's needed to prevention programmes in order that we can reduce people presenting themselves to the NHS in the first place. I agree with that; they're points I make as well. So, I was concerned when I read in the draft budget that there will be a refocusing of funding away from some potential prevention services; I've already had a number of third-party organisations contacting me with that concern. So, I would hope that the Government would have a rethink in terms of their focus on taking funding away from prevention services.
Now, can I also talk about the workforce as well? Others have mentioned this. The workforce is under a real strain in the Welsh NHS; and that is as a result of, in part, the failing to recruit and retain healthcare workers. So, my concern is that the Welsh Government will continue its reliance on agency staff and locums to fill in gaps within the Welsh NHS. There was £155 million spent on agency nursing and midwives in the last financial year; this is money that would be much better spent on permanent staff within our Welsh NHS. And of course, I hear other people—I heard Alun Davies's contribution—talking about there being a finite resource, but we should have had a workforce plan in place years ago, and, if that was the case, we would be in a much stronger and better position now. And we should have an adequate workforce plan in place now to ensure that we don't have the same debates that we're having now in five years' time.
The final point I'd make is around IT and technology and innovation, a really important area in terms of changing the way that we operate and work within our Welsh NHS. Now, I would suggest that the IT within elements of our Welsh NHS is really creaking at the seams. We have outdated operating systems, we have systems that are not talking to each other, we have only half of GPs that are connected to the Welsh NHS app, we're still buying fax machines. And e-prescribing, yes, we made some progress towards the back end of last year, but we're years behind—years behind—other parts of the UK, and the potential and the savings there we know are significant in that those are being made in other parts of the UK. And I say this because the finance Minister, at the Finance Committee just before Christmas, talked about releasing funding from innovation and research by refocusing some funding for Wales's digital strategy for health and social care. So, that concerns me—a £0.5 million cut to the Centre for Digital Public Services. Now, we know from the NHS leads in England that every £1 the NHS invests in tech generates between £3.50 and £4 in savings. So, continued commitment and investment in technology in the NHS is desperately needed, I'd suggest, so that our NHS workforce have the tools and systems at their disposal to be able to work, but also—and importantly—have that in place in order to make savings to drive that into the front line. So, these are some areas that I really hope that the Minister will consider in her debate conclusion today.

Adam Price AC: We're living through a time of hyperausterity, the likes of which none of us have seen ever before in our lifetimes, and every drop of red ink that we see on the pages of this draft budget comes at a deep human cost. Real-terms spending, public spending in Wales per person, has grown just 3 per cent over the last 14 years. That's the slowest rate of growth ever in modern Welsh history. And when you factor in as well the fact that we have an ageing, a much older population now, 14 years later, with all that entails in terms of need, then, you know, for the first time in living memory, we're no longer progressing as a society, we're going backwards. And that's why everything, from our town centres to public transport to the NHS, feels fragile, hollowed out, broken. Local government is facing bankruptcy. A&E departments are facing a daily emergency. Those working in our public services are exhausted and those who depend upon them are on the brink. People without a home fear being at death's door, and the already desperate are driven to deeper despair. The most desperate voices of all are increasingly the ones that normally we would turn to for comfort.
Late last year, I, along with other Senedd members, met with the local medical committee representatives, GPs, in the Hywel Dda region. They shared harrowing stories of having to tend to critically ill patients at night for whom no ambulance was coming. They told me they felt you almost had to be near to death now to actually be an urgent priority. They wouldn't themselves recommend to their loved ones phoning 999 if they became suddenly unwell. Providing out-of-hours care was breaking their spirit, breaking their hearts, but so was running their practices in the daytime. Some no longer heated their surgeries because they couldn't afford to. They found themselves constantly writing references for young medical staff emigrating overseas. And they didn't think the NHS as we have known it would survive another generation. Now, you may not share that analysis, but I think we surely should agree this is a time of crisis, a breaking point, in which our public services, our society, even our democracy, is fracturing. I have to say there is a painful honesty in the papers that the Government have published alongside its draft budget. The strategic impact assessment talks of the £15 million taken out of mental health funding, which the Government says will mean work on tackling mental health inequalities among the most deprived communities will be slowed down. The Government says new funding for dementia diagnoses will probably impact women, ethnic minorities and the poor most of all. The cuts in preventative health that Mabon ap Gwynfor referred to and the housing capital budget—these are the very opposite of the things that we should be doing during a cost-of-living crisis, when it's the poor and the vulnerable that are bearing the brunt.
Now, of course, these decisions—these proposals, I should say—are the indirect result of decisions made in Westminster that the majority of us here would not make. Huw Irranca referred to the umbilical cord; it's an umbilical cord that I would cut. But the decision that we have to make here—that we have to make—is what we do here now with the powers that we have. And we do have some choices. We could decide to match the Scottish higher and additional rates of income tax rather than the Westminster ones. Three years ago, that would have raised just £26 million extra a year. But, next year, if we matched those two Scottish rates, it would raise £95 million a year—almost four times as much. Add in the £2 million that ending charitable relief for private hospitals and schools would deliver. Placing a public health supplement on the business rates of large supermarkets that sold alcohol and tobacco, as the Scottish Government did a decade ago, would raise another £23 million, taking the total additional revenue to £120 million—not enough to solve all of of our problems; it would only represent just over £0.5 per cent of the Welsh Government budget, after all. But just because we cannot do everything does not mean we cannot do anything to lessen the pain of people who are looking to us to show the moral leadership that is so sadly lacking at Westminster.

Y Llywydd / The Llywydd: The Minister for finance to reply.

Rebecca Evans AC: Diolch, Llywydd. I'm really grateful to all colleagues for their contributions this afternoon, I think the vast majority of which did recognise the situation in which we find ourselves and respected, I suppose, the difficult choices that this Government is having to make.
I would like to begin by addressing the point around why we published the draft budget ahead of the Christmas recess. Well, the UK Government did publish its autumn statement on 22 November, and that is genuinely the first time at which we'll know our budget for this financial year.It's the first time that we'll hear what decisions they might make in respect of taxes, which will have a direct impact on our Welsh budget. So, that leaves us, then, with just three and a half weeks to undertake the work to produce the budget, and I can't emphasise enough how much work has to go on in those three and a half weeks.

Rebecca Evans AC: We make our own decisions around Welsh rates of income tax and other taxes that are devolved to us, for example, and then we have to agree, as a Cabinet, our revised main expenditure group allocations for all colleagues. And then all colleagues will have to go away and do that very detailed work, assembling their own line-by-line budgets, and, of course, undertaking those impact assessments, so that they know the decisions, and they understand the decisions that they're making and the impacts they will have on people with various protected characteristics. All of that takes time. All of the work that we need to do to produce the narrative documents takes time. And then we provide an absolutely vast range of documents alongside the budget, including the chief economist's report. I'll just take this opportunity to thank Jonathan Price for his work; that was his last report as chief economist before his retirement. But then we also undertake the distributional impact assessment, the budget improvement plan, our tax reports, our strategic integrated impact assessment—all of that work has to be produced, and it has to be produced at a high quality. It has to be produced, quite rightly, of course, bilingually. And three and half weeks, I think, is the absolute shortest time in which we can possibly do that work without risking accuracy, and without risking the quality of that work.
Of course we could have waited until today, or the first week back in term, to publish the draft budget, but I don't think that would have been welcomed by the Finance Committee, or the Business Committee, because it would curtail even further the time that the Senedd has available to it to scrutinise the budget. And, of course, we've got a final backstop at the point at which we can debate our final budget, because our local government colleagues rely on us to understand their settlements for next year. I don't think that that debate, when we would discuss potential scenarios for budgets, would be helpful, either to colleagues in the Senedd or to our partners in local government and other public services as well.
I will say that No. 10 does know, and considers fully, I am told, the impacts on the devolved Governments when they set their dates for their fiscal events. I know that they have a list of considerations and upon that list is the fact that devolved Governments will have to set their budgets. So, they know this, but they don't care, and it doesn't have an impact on their decisions. And you see that, of course, because we've got the spring statement the very day after we vote on our final budget. So, there will yet be changes, I think, to the budget for the next financial year as a result of that.
But, of course, we have so much opportunity for scrutiny. We've got our debate that we have every year in July. We've got today's debate, another debate in February, the debate on the final budget again coming up. So, there is a huge opportunity for scrutiny, and we absolutely relish that opportunity to explain to colleagues our plans and have that scrutiny.
I will say that I enjoyed Alun Davies's contribution particularly today, talking about potential alternatives, because it's been more than a decade since the Welsh Conservatives had the guts to bring forward an alternative budget. We still haven't heard that. We had it promised a few years ago. So, it just isn't possible, really, to scrutinise what their plans might be.
So, there are several things that I know that I want to discuss, and I just want to make sure I get through the items in time. What I want to do, really, is concentrate on the more kind of strategic areas, and areas where I think we would all benefit from some clarity, and then leave the kind of more detailed MEG-by-MEG discussions to subject committees.
We discussed during First Minister's questions misinformation. So, we heard lots of misinformation, I think, from the Conservative benches, either that or they're just simply misinformed. And I'll start with schools funding, because, as we know, schools are directly funded by local authorities here in Wales, and that is one of the reasons we took that decision to prioritise local government and to make sure that funding for schools was part of that consideration. We were able to maintain our promise to local government that they will see a 3.1 percentage increase to the budget next year, but that has made for difficult discussions and difficult decisions across Government as well.
When we asked local government about reducing the administrative burden on them, one of the things that they said that they really wanted us to look at was the way in which we administer grants. And, in education, we particularly grappled with that and being able to reduce a large number of grants now down into four grant elements, namely school standards, equity, reform and 'Cymraeg 2050'. So, I think it's really important that all colleagues understand that and view and read the budget documentation through that lens, because we've heard allegations today that we are cutting the ALN budget. We're doing absolutely nothing of the sort. What you will find is that the ALN budget is now in a different part of the budget as a result of bringing together those grants, which do then give local government more flexibility to undertake the work that they need to do, something that they said that they wanted from us. It's something that we were happy to give from that position of a trusted relationship. So, I think that's one example. And again, our successful COVID recovery programme—recruit, recover and raise standards—that was due to be tapered next year in the budget. But, actually, we've taken a different decision to protect that funding, recognising how important it is, and knowing that we're still seeing that impact of the pandemic on children and young people.

Rebecca Evans AC: And again, in health, I think that it's important to recognise that there is no reduction in our front-line delivery for mental health. We've heard about the fact that we haven't been able to uplift the budget by £15 million as we had intended, but it's not a cut in that budget. We're continuing to ring-fence mental health NHS funding, and the draft budget contains £800 million for that. It remains the largest part of the health budget, which is ring-fenced to support people. The budget will also be having an increase to reflect the inflationary pressures and the demands, equating to over £25 million. The draft mental health strategy will be published shortly. That will contain some more information.
There was a lot of interest in non-domestic rates this afternoon, so I do think it's important that we reflect why non-domestic rates are important. They provide £2 billion-worth of support for local government services—exactly the kinds of services we've talked about as being important this afternoon. What we will be doing next year is providing a package of support worth more than a third of £1 billion to support businesses with those rates, and we know that many businesses are already protected from paying any non-domestic rates through our very generous system of support. Around half pay nothing whatsoever. In fact, only around one in five businesses will attract full non-domestic rates as a result of the choices that we've made, and the fact that we have limited the multiplier will help every single business in Wales, apart from those, of course, that pay nothing at all already. Capping the multiplier increase to 5 per cent compared to the UK Government's 6.7 per cent increase does reduce the difference between the multiplier in Wales and England and it is, of course, we have to remember, just one factor that determines a ratepayer's bill, and it shouldn't be considered in isolation. Another factor, of course, is the rateable value of the property, and our tax base, with an average rateable value of around £19,000, is very different from that in England, which has a much higher average of £34,000, and that does drive a large part of the difference that you see between the average liability of ratepayers in England and Wales and, of course, you then go on to apply the reliefs to that.
Interest in tax-raising powers this afternoon. We did decide not to look at raising Welsh rates of income tax this year because of the fact that people are still paying tax rates that are higher than any level since the second world war, as a result of the UK Government's decisions. And, of course, we're still in the cost-of-living crisis. We have heard, though, examples of ways in which the tax rates could be changed to raise additional funding. We know that there's an interest in looking at the way in which our powers for tax raising work here in Wales. They are different to those that exist in Scotland, and we do pay a lot of interest to the different ways in which you could go about raising Welsh rates of income tax, bearing in mind, of course, that it's a relatively new tax, which is still bedding in. But, actually, we have seen a real net gain to us here in Wales as a result of income tax devolution. In 2020-21 and 2021-22, there was a total net gain to the Welsh Government of £134 million, or £43 per person, and I think that that shows that the system that we have is working for us in Wales. Were we to take on a different model, it could mean that we would have to take on a greater level of risk as well. So, there are, I think, debates to be had, for sure, but, obviously, some consideration to be made about the benefits of the system that we already have.
It has been referenced that we are looking at potential other waysto raise funding. Domiciliary care would be one of those areas that local government has asked us specifically to look at, so we've said that we will look at that. It's important to remember that that money would go to local authorities, because we do recognise the points that have been made by colleagues about local authorities being under an awful lot of pressure themselves. But, again, in that context, it's important to remember that around a third of people pay nothing; some people, a third, pay up to the maximum; and around a third will actually pay the maximum.
The charitable rates relief for schools and hospitals is, again, an important issue, and it's something that we intend to ask the Senedd to provide Welsh Government with powers to address in the Local Government Finance (Wales) Bill, which will be scrutinised, or is now being scrutinised by the Senedd.
I can see, Llywydd, that I'm out of time, but as I say, there are lots of opportunities for detailed discussions in the committee sessions, which will progress now.

Y Llywydd / The Llywydd: Thank you, Minister. That brings today's proceedings to a close.

The meeting ended at 18:41.

QNR

Questions to the First Minister

Darren Millar: Will the First Minister provide an update on the delivery of the North Denbighshire Community Hospital?

Mark Drakeford: The health board, county council and Welsh Government continue to have positive discussions about key aspects of the scheme and how they could be taken forward within the limits of available funding.

Sarah Murphy: What assessment has the Welsh Government made of the impact of Brexit on Bridgend?

Mark Drakeford: Leaving the single market has worsened trading conditions with Europe, impacting businesses and consumers across Wales. Bridgend is also affected by the UK Government’s failure to replace more than £1 billion of Wales’s EU funding. The fuller economic and social impacts are significant but may take years to show.

James Evans: Will the First Minister outline what the Welsh Government is doing to support armed forces veterans who need mental health support?

Mark Drakeford: Veterans NHS Wales is a tailored national service across Wales providing specialised, priority service for armed forces veterans experiencing mental health difficulties related to their military service. In 2021 Welsh Government provided a 35 per cent increase in funding to VNHSW, bringing it to £920,000 per annum.

Sam Rowlands: Will the First Minister provide an update on plans for a review of the default 20mph speed limit?

Mark Drakeford: We are working collaboratively with local authorities on the implementation of 20 mph and the exceptions guidance review is under way. This will help establish where clarifications are needed to encourage greater consistency across Wales.